会计学原理financialaccountingbyrobertlibby第八版第三章答案

合集下载

会计学原理Financial-Accounting-by-Robert-Libby第八版-第三章-答案

会计学原理Financial-Accounting-by-Rob ert-Libby第八版-第三章-答案Chapter 3Operating Decisions andthe Accounting SystemANSWERS TO QUESTIONS1. A typical business operating cycle for a manufacturer would be as follows:inventory is purchased, cash is paid to suppliers, the product is manufactured and sold on credit, and the cash is collected from the customer.2. The time period assumption means that the financial condition andperformance of a business can be reported periodically, usually every month, quarter, or year, even though the life of the business is much longer.3. Net Income = Revenues + Gains - Expenses - Losses.Each element is defined as follows:Revenues -- increases in assets or settlements of liabilities from ongoing operations.Gains -- increases in assets or settlements of liabilities from peripheral transactions.Expenses -- decreases in assets or increases in liabilities from ongoingoperations.Losses -- decreases in assets or increases in liabilities from peripheraltransactions.4. Both revenues and gains are inflows of net assets. However, revenuesoccur in the normal course of operations, whereas gains occur from transactions peripheral to the central activities of the company. An example is selling land at a price above cost (at a gain) for companies not in the business of selling land.Both expenses and losses are outflows of net assets. However, expenses occur in the normal course of operations, whereas losses occur from transactions peripheral to the central activities of the company. An example is a loss suffered from fire damage.5. Accrual accounting requires recording revenues when earned andrecording expenses when incurred, regardless of the timing of cash receipts or payments. Cash basis accounting is recording revenues when cash is received and expenses when cash is paid.Financial Accounting, 8/e 3-2 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Financial Accounting, 8/e3-3© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.6. The four criteria that must be met for revenue to be recognized under theaccrual basis of accounting are (1) delivery has occurred or services have been rendered, (2) there is persuasive evidence of an arrangement for customer payment, (3) the price is fixed or determinable, and (4) collection is reasonably assured.7. The expense matching principle requires that expenses be recorded whenincurred in earning revenue. For example, the cost of inventory sold during a period is recorded in the same period as the sale, not when the goods are produced and held for sale.8. Net income equals revenues minus expenses. Thus revenues increase netincome and expenses decrease net income. Because net income increases stockholders’ equity, revenues increase stockholders’ equity and expenses decrease it.9. Reve nues increase stockholders’ equity and expenses decreasestockholders’ equity. To increase stockholders’ equity, an account must be credited; to decrease stockholders’ equity, an account must be debited. Thus revenues are recorded as credits and expenses as debits. 10.11.12.13. Total net profit margin ratio is calculated as Net Income Net Sales (orOperating Revenues). The net profit margin ratio measures how much of every sales dollar is profit. An increasing ratio suggests that the company is managing its sales and expenses effectively.ANSWERS TO MULTIPLE CHOICE1. c2. a3. b4. b5. c6. c7. d8. b9. a10. bFinancial Accounting, 8/e 3-4 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Authors' Recommended Solution Time(Time in minutes)* Due to the nature of this project, it is very difficult to estimate the amount of time students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.Financial Accounting, 8/e 3-5 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Financial Accounting, 8/e 3-6© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.MINI-EXERCISESM3–1.TERMG (1) LossesC (2) Expense matching principle F (3) RevenuesE (4) Time period assumption B(5) Operating cycleM3–2.Cash Basis Income StatementAccrual Basis Income StatementRevenues: Cash sales Customer deposits$8,000 5,000 Revenues: Sales to customers$18,000 Expenses:Inventory purchases Wages paid 1,000 900 Expenses: Cost of sales Wages expense Utilities expense 9,000 900 300Net Income$11,100Net Income $7,800Revenue Account Affected Amount of Revenue Earned in JulyM3–4.Expense Account Affected Amount of Expense Incurred in JulyFinancial Accounting, 8/e 3-7 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.a. Cash (+A) ............................................................................ 15,000Games Revenue (+R, +SE) .......................................... 15,000 b. Cash (+A) ............................................................................ 3,000Accounts Receivable (+A) ................................................ 5,000 Sales Revenue (+R, +SE) ............................................. 8,000 c. Cash (+A) ............................................................................ 4,000Accounts Receivable (-A) ........................................... 4,000 d. Cash (+A) ............................................................................ 2,500Unearned Revenue (+L) ............................................... 2,500 M3–6.e. Cost of Goods Sold (+E, -SE)........................................... 6,800Inventory (-A) ............................................................... 6,800 f. Accounts Payable (–L) (800)Cash (-A) (800)g. Wages Expense (+E, -SE) ................................................. 3,500Cash (-A) ...................................................................... 3,500 h. Insurance Expense (+E, -SE) . (500)Prepaid Expenses (+A) ...................................................... 1,00 Cash (-A) ...................................................................... 1,500 i. Repairs Expense (+E, -SE) .. (700)Cash (-A) (700)j. Utilities Expense (+E, -SE) (900)Accounts Payable (+L) (900)Financial Accounting, 8/e 3-8 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Transaction (c) results in an increase in an asset (cash) and a decrease in an asset (accounts receivable). Therefore, there is no net effect on assets.M3–8.Transaction (h) results in an increase in an asset (prepaid expenses) and a decrease in an asset (cash). Therefore, the net effect on assets is 500.Financial Accounting, 8/e 3-9 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Craig’s Bowling, Inc.Income StatementFor the Month of July 2014Revenues:Games revenue $15,000Sales revenue 8,000Total revenues 23,000Expenses:Cost of goods sold 6,800Utilities expense 900Wages expense 3,500Insurance expense 500Repairs expense 700Total expenses 12,400Net income $ 10,600M3–10.Financial Accounting, 8/e 3-10 © 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.M3–11.These results suggest that Jen’s Jewelry Company earned approximately $0.31 for every dollar of revenue in 2015, and over time, the ratio has improved. Jen’s has become more effective at managing sales and expenses.As additional analysis:Between 2013 to 2014 and 2014 to 2015, sales have increased at a lower percentage than net income. This suggests that the company has been more effective at controlling expenses than generating revenues.EXERCISESE3–1.TERMK (1) ExpensesE (2) GainsG (3) Revenue realization principleI (4) Cash basis accountingM (5) Unearned revenueC (6) Operating cycleD (7) Accrual basis accountingF (8) Prepaid expensesJ (9) Revenues - Expenses = Net IncomeL (10) Ending Retained Earnings =Beginning Retained Earnings + Net Income - Dividends DeclaredE3–2.Req. 1Cash Basis Income StatementAccrual Basis Income StatementRevenues:Cash sales Customer deposits $500,00070,000Revenues:Sales tocustomers$750,000Expenses:Inventory purchases Wages paidUtilities paid90,000180,30017,200Expenses:Cost of salesWages expenseUtilities expense485,000184,00019,130Net Income $282,500 Net Income $61,870Req. 2Accrual basis financial statements provide more useful information to external users. Financial statements created under cash basis accounting normally postpone (e.g., $250,000 credit sales) or accelerate (e.g., $70,000 customer deposits) recognition of revenues and expenses long before or after goods andservices are produced and delivered (until cash is received or paid). They also do not necessarily reflect all assets or liabilities of a company on a particular date.Activity Revenue AccountAmount of RevenueActivity Expense AccountAmount of ExpenseE3–5.Transaction (k) results in an increase in an asset (cash) and a decrease in an asset (accounts receivable). Therefore, there is no net effect on assets.* A loss affects net income negatively, as do expenses.E3–6.Transaction (f) results in an increase in an asset (property, plant, and equipment) and a decrease in an asset (cash). Therefore, there is no net effect on assets.E3–7.(in thousands)a. Plant and equipment (+A) (636)Cash ( A) (636)Debits equal credits. Assets increase and decrease by the same amount.b. Cash (+A) (181)Short-term notes payable (+L) (181)Debits equal credits. Assets and liabilities increase by the same amount.c. Cash (+A) ..........................................................................Accounts receivable (+A) ................................................ 10,765 28,558Service revenue (+R, +SE) ........................................ 39,323 Debits equal credits. Revenue increases retained earnings (part of stockholders' equity). Stockholders' equity and assets increase by the same amount.E3–7. (continued)d. Accounts payable (-L) ..................................................... 32,074Cash (-A) ................................................................... 32,074 Debits equal credits. Assets and liabilities decrease by the same amount.e. Inventory (+A) ................................................................... 32,305Accounts payable (+L) .............................................. 32,305 Debits equal credits. Assets and liabilities increase by the same amount.f. Wages expense (+E, -SE) ............................................... 3,500Cash (-A) ................................................................... 3,500 Debits equal credits. Expenses decrease retained earnings (part ofstockholders' equity). Stockholders' equity and assets decrease by thesame amount.g. Cash (+A) .......................................................................... 39,043Accounts receivable (-A) ....................................... 39,043 Debits equal credits. Assets increase and decrease by the same amount.h. Fuel expense (+E, -SE) (750)Cash (-A) (750)Debits equal credits. Expenses decrease retained earnings (part ofstockholders' equity). Stockholders' equity and assets decrease by thesame amount.i. Retained earnings (-SE) (597)Cash (-A) (597)Debits equal credits. Assets and stock holders’ equity decrease by thesame amount.j. Utilities expense (+E, -SE) (68)Cash (-A) ................................................................... Accounts payable (+L) .............................................. 55 13Debits equal credits. Expenses decrease retained earnings (part of stockholders' equity). Together, stockholders' equity and liabilities decrease by the same amount as assets.E3–8.Req. 1a.Cash (+A) ................................................................... 2,300,000Short-term note payable (+L) ........................ 2,300,000 Debits equal credits. Assets and liabilities increase by the same amount.b.Equipment (+A) ......................................................... 98,000Cash (-A) ........................................................ 98,000 Debits equal credits. Assets increase and decrease by the same amount.c.Merchandise inventory (+A) .................................... 35,000Accounts payable (+L) .................................. 35,000 Debits equal credits. Assets and liabilities increase by the same amount.d.Repairs (or maintenance) expense (+E, -SE) ......... 62,000Cash (-A) ........................................................ 62,000 Debits equal credits. Expenses decrease retained earnings (part ofstockholders' equity). Stockholders' equity and assets decrease by thesame amount.e.Cash (+A) ................................................................... 390,000Unearned pass revenue (+L) ......................... 390,000 Debits equal credits. Since the season passes are sold before Vail Resorts provides service, revenue is deferred until it is earned. Assets andliabilities increase by the same amount.f.Two transactions occur:(1) Accounts receivable (+A) (800)Ski shop sales revenue (+R, +SE) (800)Debits equal credits. Revenue increases retained earnings (a part ofstockholders' equity). Stockholders' equity and assets increase by thesame amount.(2) Cost of goods sold (+E, -SE) (500)Merchandise inventory (-A) (500)Debits equal credits. Expenses decrease retained earnings (a part ofstockholders' equity). Stockholders' equity and assets decrease by thesame amount.E3–8. (continued)g.Cash (+A) ................................................................... 320,000Lift revenue (+R, +SE) .................................... 320,000 Debits equal credits. Revenue increases retained earnings (a part ofstockholders' equity). Stockholders' equity and assets increase by thesame amount.h.Cash (+A) ................................................................... 3,500Unearned rent revenue (+L) .......................... 3,500 Debits equal credits. Since the rent is received before the townhouse isused, revenue is deferred until it is earned. Assets and liabilities increase by the same amount.i. Accounts payable (-L) ............................................. 17,500Cash (-A) ........................................................ 17,500 Debits equal credits. Assets and liabilities decrease by the same amount. j.Cash (+A) . (400)Accounts receivable (-A) (400)Debits equal credits. Assets increase and decrease by the same amount. k.Wages expense (+E, -SE) ........................................ 245,000Cash (-A) ........................................................ 245,000 Debits equal credits. Expenses decrease retained earnings (a part ofstockholders' equity). Stockholders' equity and assets decrease by thesame amount.Req. 22/1 Rent expense (+E, -SE) (275)Cash (-A) (275)2/2 Fuel expense (+E, -SE) (490)Accounts payable (+L) (490)2/4 Cash (+A) (820)Unearned revenue (+L) (820)2/7 Cash (+A) (910)Transport revenue (+R, +SE) (910)2/10 Advertising expense (+E, -SE) (175)Cash (-A) (175)2/14 Wages payable (-L) ......................................................... 2,300Cash (-A) ......................................................... 2,3002/18 Cash (+A) ..........................................................................Accounts receivable (+A) ................................................ 1,600 2,200Transport revenue (+R, +SE) ......................... 3,800 2/25 Parts supplies (+A) .......................................................... 2,550Accounts payable (+L) ................................... 2,550 2/27 Retained earnings (-SE) .. (200)Dividends payable (+L) (200)Req. 1 and 2Accounts Unearned Fee NoteAdditional Paid-inRebuilding Fees RentItem (f) is not a transaction; there has been no exchange.E3–10. (continued)Req. 3Net income using the accrual basis of accounting:Revenues $19,850 ($19,000 + $850)– Expenses 16,900 ($16,500 + $400)Net Income $ 2,950Assets = Liabilities + Stockholders’ Equity$12,090 $ 7,700 $ 1,70024,800 4,440 7,8202,460 48,500 9,36010,420 2,950 netincome7,40025,300$82,470 $60,640 $21,830Req. 4Net income using the cash basis of accounting:Cash receipts $27,650 (transactions a through d)–Cash disbursements 19,760 (transactions g, i, and k)Net Income $ 7,890Cash basis net income ($7,890) is higher than accrual basis net income ($2,950) because of the differences in the timing of recording revenues versus receipts and expenses versus disbursements between the two methods. The $7,800 higher amount in cash receipts over revenues includes cash received prior to being earned (from (b), $600) and cash received after being earned (in (d), $7,200). The $2,860 higher amount in cash disbursements over expenses includes cash paid after being incurred in the prior period (in (g), $2,300), plus cash paid for supplies to be used and expensed in the future (in (k), $960), less an expense incurred in January to be paid in February (in (e), $400).STACEY’S PIANO REBUILDING COMPANYIncome Statement (unadjusted)For the Month Ended January 31, 2014 Operating Revenues:Rebuilding fees revenue $ 19,000 Total operating revenues 19,000 Operating Expenses:Wages expense 16,500 Utilities expense 400 Total operating expenses 16,900 Operating Income 2,100 Other Item:Rent revenue 850 Net Income $ 2,950Req. 1 and 2Common Additional RetainedFood Sales Revenue Catering Sales RevenueE3–14.Req. 1TRAVELING GOURMET, INC.Income Statement (unadjusted)For the Month Ended March 31, 2014 Revenues:Food sales revenueCatering sales revenueTotal revenues Expenses:Supplies expenseUtilities expenseWages expenseFuel expenseTotal costs and expenses $ 11,9004,20016,10010,8304206,28036317,893Net Loss $ (1,793) Req. 2Transaction O, I, or F Activity (or No Effect) on Statement ofDirection and AmountReq. 3The company generated a small loss of 1,793 during its first month of operations, before making any adjusting entries. The adjusting entries for use of the building and equipment and interest expense on the borrowing will increase the loss. Cash flows from operating activities were also negative at $2,973 (= + 11,900 + 2,600 –10,830 –363 –6,280) . So far the company does not appear to be successful, but it is only in its first month of operating a retail store. If sales can be increased without inflating fixed costs (particularly salaries expense), the company may soon turn a profit. It is not unusual for small businesses to report a loss or have negative cash flows from operations as they start up operations.E3–15.Req. 1Transaction Brief Explanationa Issued 10,000 shares of common stock to shareholders for $82,000cash.b Purchased store fixtures for $15,400 cash.c Purchased $24,800 of inventory, paying $6,200 cash and thebalance on account.d Sold $14,000 of goods or services to customers, receiving $9,820cash and the balance on account. The cost of the goods sold was$7,000.e Used $1,480 of utilities during the month, not yet paid.f Paid $1,300 in wages to employees.g Paid $2,480 in cash for rent, $620 related to the current month and$1,860 related to future months.h Received $3,960 cash from customers, $1,450 related to currentsales and $2,510 related to goods or services to be provided in thefuture.Req. 2Kate’s Kite CompanyIncome StatementFor the Month Ended April 30, 2014Sales Revenue Expenses:Cost of salesWages expenseRent expenseUtilities expenseTotal expenses $ 15,4507,0001,3006201,48010,400Net Income $ 5,050Kate’s Kite CompanyBalance SheetAt April 30, 2014Assets Liabilities and Shareholders’ Equity Current Assets: Current Liabilities:Cash $70,400 Accounts payable $20,080 Accounts receivable 4,180 Unearned revenue 2,510 Inventory 17,800 Total current liabilities 22,590 Prepaid expenses 1,860 Shareholders’ Equity:Total current assets 94,240 Common stock 10,000 Store fixtures 15,400 Additional paid-in capital 72,000Retained earnings 5,050Total shareholders’equity87,050Total Assets $109,640 Total Liabilities &Shareholders’ Equity$109,640E3–16.Req. 1Assets = Liabilities + Stockholders’ Equity $ 3,200 $ 2,400 $ 800 8,000 5,600 4,0006,400 1,600 3,200 $17,600 $9,600 $ 8,000Req. 2Accounts Long-TermAccounts Unearned Long-TermAdditionalConsulting Fee InvestmentRent ExpenseE3–16. (continued)Req. 3Revenues $58,400 ($58,000 from sales + $400 on investments)– Expenses 56,400 ($36,000 + $12,000 + $800 + $7,600)Net Income $ 2,000Assets = Liabilities + Stockholders’ Equity$ 1,120 $ 1,600 $ 80012,400 7,200 4,0006,400 1,600 2,7202,000 net income $19,920 $10,400 $ 9,520 Req. 4Net Profit Margin = Net Income = $2,000 = 0.0345Ratio Sales (Operating) Revenues $58,000* or 3.45% * The $400 of investment income is not an operating revenue and is not included in the computation.The increasing trend in the net profit margin ratio (from 2.5% in 2013 to 2.9% in 2014 and then to 3.45% in 2015) suggests that the company is managing its sales and expenses more effectively over time.E3–17.Req. 1Accounts receivable increases with customer sales on account and decreases with cash payments received from customers.Prepaid expenses increase with cash payments of expenses related to future periods and decrease as these expenses are incurred over time.Unearned subscriptions increase with cash payments received from customers for goods or services to be provided in the future and decreases when those goods or services are provided.Req. 2Trade Accounts ReceivablePrepaidExpensesUnearnedSubscriptionsComputations:Beginning + “+”-“-”= EndingTrade accounts receivable 717 + 5,240 -??==6935,264Prepaid expenses 95 + 203 -??==107191Unearned subscriptions 224 + 2,690 -??==2312,683E3–18.ITEM LOCATION1. Description of a company’sprimary business(es). Letter to shareholders;Management’s Discussion and Analysis; Summary of significant accounting policies note2. Income taxes paid. Notes; Statement of cash flows3. Accounts receivable. Balance sheet4. Cash flow from operatingactivities.Statement of cash flows5. Description of a company’srevenue recognition policy. Summary of significant accounting policies note6. The inventory sold during theyear.Income statement (Cost of Goods Sold)7. The data needed to compute thenet profit margin ratio.Income statementPROBLEMSP3-1.Transactions Debit Credita. Example: Purchased equipment for use in the business;5 1, 8paid one-third cash and signed a note payable for thebalance.b. Paid cash for salaries and wages earned by employees thisperiod.15 1 c. Paid cash on accounts payable for expensesincurred last period.7 1d. Purchased supplies to be used later; paid cash. 3 1e. Performed services this period on credit. 2 14f. Collected cash on accounts receivable for servicesperformed last period. 1 2g. Issued stock to new investors. 1 11, 12h. Paid operating expenses incurred this period.15 1i. Incurred operating expenses this period to be paidnext period.15 7 j. Purchased a patent (an intangible asset); paid cash. 6 1 k. Collected cash for services performed this period. 1 14 l. Used some of the supplies on hand for operations.15 3 m. Paid three-fourths of the income tax expense for the year;the balance will be paid next year.16 1, 10 n. Made a payment on the equipment note in (a); the paymentwas part principal and part interest expense.8, 17 1 o. On the last day of the current period, paid cash for aninsurance policy covering the next two years. 4 1a. Cash (+A) ........................................................................... 40,000Common stock (+SE) (20)Additional paid-in capital (+SE) ................................ 39,980 b. Cash (+A) ........................................................................... 60,000Note payable (long-term) (+L) ..................................... 60,000 c. Rent expense (+E, -SE) .................................................... 1,500Prepaid rent (+A) ............................................................... 1,500 Cash (-A) ...................................................................... 3,000 d. Prepaid insurance (+A) ..................................................... 2,400Cash (-A) ..................................................................... 2,400 e. Furniture and fixtures (or Equipment) (+A) ..................... 15,000Accounts payable (+L) ............................................... 12,000Cash (-A) ..................................................................... 3,000 f. Inventory (+A) .................................................................... 2,800Cash (-A) ..................................................................... 2,800 g. Advertising expense (+E, -SE) .. (350)Cash (-A) (350)h. Cash (+A) (850)Accounts receivable (+A) (850)Sales revenue (+R, +SE) ............................................ 1,700 Cost of goods sold (+E, -SE) . (900)Inventory (-A) (900)i. Accounts payable (-L) ...................................................... 12,000Cash (-A) ..................................................................... 12,000 j. Cash (+A) (210)Accounts receivable (-A) (210)。

会计学原理英文版第

会计学原理英文版第Principles of AccountingIntroductionAccounting, often referred to as the language of business, is a systematic process of recording, analyzing, and reporting financial transactions. It provides crucial information to businesses, investors, and other stakeholders about thefinancial health and performance of an organization. Accounting principles serve as the foundation for recording and reporting financial information accurately and consistently. This paper will explore the key principles of accounting and their importance in financial reporting.Accrual PrincipleThe accrual principle states that financial transactions should be recorded in the accounting period in which they occur, rather than when cash is received or paid. This principle ensures that revenues and expenses are recognized in the period in which they are earned or incurred. It enables businesses to present a more accurate and reliable picture of their financial performance.Principle of Historical CostThe historical cost principle states that assets should be recorded and reported at their original cost, which includesboth the purchase price and any other costs necessary to get the asset ready for use. This principle provides businesses with a reliable basis to measure and report their financial position. It also allows for consistent and objective valuation of assets, as opposed to subjective estimation.Matching PrincipleThe matching principle states that businesses should recognize expenses incurred in generating revenue in the same period as the revenue they help to generate. This principle ensures that financial statements accurately reflect the relationship between revenues and the expenses necessary to earn those revenues. By matching revenues and expenses, businesses can present a more accurate measure of their profitability.Conservatism PrincipleThe conservatism principle suggests that when there is uncertainty in accounting estimates, businesses should adopt a more conservative approach. This means that businesses shoulderr on the side of caution and recognize potential losses or expenses rather than potential gains. This principle helps to prevent overstatement of assets and revenues, and increases the reliability of financial statements.Consistency PrincipleMateriality PrincipleThe materiality principle states that businesses should only include information in financial statements if it is significant enough to influence the decision-making of users. This principle allows businesses to focus on the most relevant and important information, while avoiding excessive details that may distort the overall picture. Materiality is determined based on both quantitative and qualitative factors.Importance of Accounting PrinciplesConclusionAccounting principles serve as the foundation for recording, analyzing, and reporting financial transactions. They ensure accuracy, consistency, and reliability in financial reporting. The accrual principle, historical cost principle, matching principle, conservatism principle, consistency principle, and materiality principle are key principles that guide financial accounting practices. By adhering to these principles, businesses can present a more accurate and meaningful picture of their financial health and performance.。

会计学原理FinancialAccountingbyRobertLibby第八版第七章答案

会计学原理FinancialAccountingbyRobertLibby第⼋版第七章答案Chapter 7Reporting and Interpreting Cost of Goods Sold and InventoryANSWERS TO QUESTIONS1. Inventory often is one of the largest amounts listed under assets on the balancesheet which means that it represents a significant amount of the resources available to the business. The inventory may be excessive in amount, which is a needless waste of resources; alternatively it may be too low, which may result in lost sales. Therefore, for internal users inventory control is very important. On the income statement, inventory exerts a direct impact on the amount of income.Therefore, statement users are interested particularly in the amount of this effect and the way in which inventory is measured. Because of its impact on both the balance sheet and the income statement, it is of particular interest to all statement users. 2. Fundamentally, inventory should include those items, and only those items,legally owned by the business. That is, inventory should include all goods that the company owns, regardless of their particular location at the time.3. The cost principle governs the measurement of the ending inventory amount.The ending inventory is determined in units and the cost of each unit is applied to that number. Under the cost principle, the unit cost is the sum of all costs incurred in obtaining one unit of the inventory item in its present state.4. Goods available for sale is the sum of the beginning inventory and the amount ofgoods purchased during the period. Cost of goods sold is the amount of goods available for sale less the ending inventory.5. Beginning inventory is the stock of goods on hand (in inventory) at the start of theaccounting period. Ending inventory is the stock of goods on hand (in inventory) at the end of the accounting period. The ending inventory of one period automatically becomes the beginning inventory of the next period.6. (a) Average cost–This inventory costing method in a periodic inventorysystem is based on a weighted-average cost for the entire period. At theend of the accounting period the average cost is computed by dividing thegoods available for sale in units into the cost of goods available for salein dollars. The computed unit cost then is used to determine the cost ofgoods sold for the period by multiplying the units sold by this average unitcost. Similarly, the ending inventory for the period is determined bymultiplying this average unit cost by the number of units on hand.(b) FIFO–This inventory costing method views the first units purchased as thefirst units sold. Under this method cost of goods sold is costed at theoldest unit costs, and the ending inventory is costed at the newest unitcosts.(c) LIFO–This inventory costing method assumes that the last unitspurchased are the first units sold. Under this method cost of goods sold iscosted at the newest unit costs and the ending inventory is costed at theoldest unit costs.(d) Specific identification–This inventory costing method requires that eachitem in the beginning inventory and each item purchased during the periodbe identified specifically so that its unit cost can be determined byidentifying the specific item sold. This method usually requires that eachitem be marked, often with a code that indicates its cost. When it is sold,that unit cost is the cost of goods sold amount. It often is characterized asa pick-and-choose method. When the ending inventory is taken, thespecific items on hand, valued at the cost indicated on each of them, is theending inventory amount.7. The specific identification method of inventory costing is subject to manipulation.Manipulation is possible because one can, at the time of each sale, select (pick and choose) from the shelf the item that has the highest or the lowest (or some other) unit cost with no particular rationale for the choice. The rationale may be that it is desired to influence, by arbitrary choice, both the amount of income and the amount of ending inventory to be reported on the financial statements. To illustrate, assume item A is stocked and three are on the shelf. One cost $100;the second one cost $115; and the third cost $125. Now assume that one unit is sold for $200. If it is assumed arbitrarily that the first unit is sold, the gross profit will be $100; if the second unit is selected, the gross profit will be $85; or alternatively, if the third unit is selected, the gross profit will be $75. Thus, the amount of gross profit (and income) will vary significantly depending upon which one of the three is selected arbitrarily from the shelf for this particular sale. This assumes that all three items are identical in every respect except for their unit costs. Of course, the selection of a different unit cost, in this case, also will influence the ending inventory for the two remaining items.8. LIFO and FIFO have opposite effects on the inventory amount reported underassets on the balance sheet. The ending inventory is based upon either the oldest unit cost or the newest unit cost, depending upon which method is used.Under FIFO, the ending inventory is costed at the newest unit costs, and under LIFO, the ending inventory is costed at the oldest unit costs. Therefore, when prices are rising, the ending inventory reported on the balance sheet will be higher under FIFO than under LIFO. Conversely, when prices are falling the ending inventory on the balance sheet will be higher under LIFO than under FIFO.9. LIFO versus FIFO will affect the income statement in two ways: (1) the amount ofcost of goods sold and (2) income. When the prices are rising, FIFO will give a lower cost of goods sold amount and hence a higher income amount than will LIFO. In contrast, when prices are falling, FIFO will give a higher cost of goods sold amount and, as a result, a lower income amount.10. When prices are rising,LIFO causes a lower taxable income than does FIFO.Therefore, when prices are rising, income tax is less under LIFO than FIFO. A lower tax bill saves cash (reduces cash outflow for income tax). The total amount of cash saved is the difference between LIFO and FIFO inventory amounts multiplied by the income tax rate.11. LCM is applied when market (defined as current replacement cost) is lower thanthe cost of units on hand. The ending inventory is valued at market (lower), which (a) reduces net income and (b) reduces the inventory amount reported on the balance sheet. The effect of applying LCM is to include the holding loss on the income statement (as a part of CGS) in the period in which the replacement cost drops below cost rather than in the period of actual sale.12. When a perpetual inventory system is used, the unit cost must be known for eachitem sold at the date of each sale because at that time two things happen: (a) the units sold and their costs are removed fromthe perpetual inventory record and the new inventory balance is determined; (b) the cost of goods sold is determined from the perpetual inventory record and an entry in the accounts is made as a debit to Cost of Goods Sold and a credit to Inventory. In contrast, when a periodic inventory system is used the unit cost need not be known at the date of each sale. In fact, the periodic system is designed so that cost of goods sold for each sale is not known at the time of sale. At the end of the period, under the periodic inventory system, cost of goods sold is determined by adding the beginning inventory to the total goods purchased for the period and subtracting from that total the ending inventory amount. The ending inventory amount is determined by means of a physical inventory count of the goods remaining on hand and with the units valued on a unit cost basis in accordance with the cost principle (by applying an appropriate inventory costing method). ANSWERS TO MULTIPLE CHOICE1. c)2. d)3. a)4. a)5. c)6. c)7. a)8. c)9. c) 10. a)Authors' Recommended Solution Time(Time in minutes)* Due to the nature of these cases and projects, it is very difficult to estimate the amount of time students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time to discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.MINI-EXERCISESM7–1.Type of BusinessType of Inventory Merchandising ManufacturingWork in process XFinished goods XMerchandise XRaw materials XM7–2.To record the purchase of 90 new shirts in accordance with the cost principle (perpetual inventory system):Inventory (+A) .............................................................. 2,150Cash ( A) .......................................................... 2,150 Cost: $1,800 + $185 + $165 = $2,150.The $108 interest expense is not a proper cost of the merchandise; it is recorded as prepaid interest expense and later as interest expense.M7–3.(1) Part of inventory (2) Expense as incurreda. Wages of factory workers Xb. Costs of raw materials purchased Xc. Sales salaries Xd. Heat, light, and power for the factory building Xe. Heat, light, and power for the headquartersoffice buildingXComputation: Simply rearrange the basic inventory model (BI + P – EI = CGS): Cost of goods sold ................................................. $11,042 million + Ending inventory .................................................... 2,916 million –Beginning inventory ............................................... (3,213) million Purchases .............................................................. $10,745 millionM7–5.(a) Declining costsHighest net income LIFOHighest inventory LIFO(b) Rising costsHighest net income FIFOHighest inventory FIFOM7–6.LIFO is often selected when costs are rising because it reduces the company’s tax liability which increases cash and benefits shareholders. However, it also reduces reported net income.M7–7.Quantity Cost perItem ReplacementCost per ItemLower of Costor MarketReported onBalance SheetItem A 70 $ 110 $100 $100 70 x $100 = $7,000 Item B 30 60 85 60 30 x $60 = $1,800 Total $8,800 M7–8.+ (a) Parts inventory delivered daily by suppliers instead of weekly.NE (b)Extend payments for inventory purchases from 15 days to 30 days.+ (c) Shorten production process from 10 days to 8 days.Understatement of the 2014 ending inventory by $50,000 caused 2014 pretax income to be understated and 2015 pretax income to be overstated by the same amount. Overstatement of the 2014 ending inventory would have the opposite effect; that is, 2014 pretax income would be overstated by $50,000 and 2015 pretax income understated by $50,000. Total pretax income for the two years combined would be correct.EXERCISESE7–1Item Amount ExplanationEnding inventory (physical count onDecember 31, 2014)$34,500 Per physical inventory.a. Goods purchased and in transit + 700 Goods purchased and in transit,F.O.B. shipping point, are ownedby the purchaser.b. Samples out on trial tocustomer + 1,800 Samples held by a customer ontrial are still owned by the vendor;no sale or transfer of ownershiphas occurred.c. Goods in transit to customer Goods shipped to customers,F.O.B. shipping point, are ownedby the customer becauseownership passed when they weredelivered to the transportationcompany. The inventory correctlyexcluded these items.d. Goods sold and in transit + 1,500 Goods sold and in transit, F.O.B.destination, are owned by the selleruntil they reach destination.Correct inventory, December 31, 2014 $38,500E7–2.(Italics for missing amounts only.)Case A Case B Case CNet sales revenue .......... $7,500 $4,800$5,000 Beginning inventory ........ $11,200 $ 7,000 $ 4,000 Purchases .................. 4,500 8,050 9,500Goods available for sale . 15,700 15,050 13,500Ending inventory ............ 9,000 11,050 9,300Cost of goods sold.......... 6,700 4,000 4,200 Gross profit .................. 800 800 800 Expenses .................. 300 1,000 700 Pretax income ................ $ 500 $ (200) $ 100E7–3.E7–4.Computations:Simply rearrange the cost of goods sold equationBI + P – EI = CGSP = CGS – BI + EICost of goods sold ................................... $1,639,188,000 –Beginning inventory .................................. (385,857,000) + Ending inventory ...................................... 569,818,000 Purchases ................................................ $1,823,149,000AverageUnits FIFO LIFO Cost Cost of goods sold:Beginning inventory ($5) ............. 2,000 $10,000 $10,000 $10,000 Purchases (March 21) ($6) ......... 5,000 30,000 30,000 30,000 (August 1) ($8) .......... 3,000 24,000 24,000 24,000Goods available for sale .. 10,000 64,000 64,000 64,000 Ending inventory* ....................... 4,000 30,000 22,000 25,600 Cost of goods sold** ........ 6,000 $34,000 $42,000 $38,400 *Ending inventory computations:FIFO: (3,000 units @ $8) + (1,000 units @ $6) = $30,000.LIFO: (2,000 units @ $5) + (2,000 units @ $6) = $22,000.Average: [(2,000 units @ $5) + (5,000 units @ $6) + (3,000 units @ $8)] =$64,000 ÷ 10,000 units = $6.40 per unit.4,000 units @ $6.40 = $25,600.**Cost of goods sold computations:FIFO: (2,000 units @ $5) + (4,000 units @ $6) = $34,000.LIFO: (3,000 units @ $8) + (3,000 units @ $6) = $42,000.Average: [(2,000 units @ $5) + (5,000 units @ $6) + (3,000 units @ $8)] =$64,000 ÷ 10,000 units = $6.40 per unit.6,000 units @ $6.40 = $38,400.AverageUnits FIFO LIFO Cost Cost of goods sold:Beginning inventory ($5) ............. 2,000 $10,000 $10,000 $10,000 Purchases (March 21) ($4) ......... 6,000 24,000 24,000 24,000 (August 1) ($2) .......... 4,000 8,000 8,000 8,000Goods available for sale .. 12,000 42,000 42,000 42,000 Ending inventory* ....................... 3,000 6,000 14,000 10,500 Cost of goods sold ........... 9,000 $36,000 $28,000 $31,500 *Ending inventory computations:FIFO: (3,000 units @ $2) = $6,000.LIFO: (2,000 units @ $5) + (1,000 units @ $4) = $14,000.Average: [(2,000 units @ $5) + (6,000 units @ $4) + (4,000 units @ $2)] =$42,000 ÷ 12,000 units = $3.50 per unit.3,000 units @ $3.50 = $10,500.**Cost of goods sold computations:FIFO: (2,000 units @ $5) + (6,000 units @ $4) + (1,000 units @ $2) = $36,000.LIFO: (4,000 units @ $2) + (5,000 units @ $4) = $28,000.Average: [(2,000 units @ $5) + (6,000 units @ $4) + (4,000 units @ $2)] =$42,000 ÷ 12,000 units = $3.50 per unit.9,000 units @ $3.50 = $31,500.E7–7.Req. 1BROADHEAD COMPANYIncome StatementFor the Year Ended December 31, 2015Case A Case BFIFO LIFOSales revenue1 .............................. $500,000 $500,000 Cost of goods sold:Beginning inventory ................ $ 27,000 $ 27,000Purchases .............................. 195,000 195,000Goods available for sale2 222,000 222,000 Ending inventory3 .................. 125,000 87,000Cost of goods sold4......... 97,000 135,000 Gross profit .................................. 403,000 365,000 Expenses .................................. 195,000 195,000 Pretax income ................................ $208,000 $170,000 Computations:(1) Sales: (10,000 units @ $50) = $500,000(2) Goods available for sale (for both cases):Units Unit Cost Total Cost Beginning inventory 3,000 $9 $ 27,000Purchase, April 11, 2015 9,000 10 90,000Purchase, June 1, 2015 7,000 15 105,000 Goods available for sale 19,000 $222,000 (3) Ending inventory (19,000 available – 10,000 units sold = 9,000 units):Case A FIFO:(7,000 units @ $15 = $105,000) +(2,000 units @ $10 = $20,000) = $125,000.Case B LIFO:(3,000 units @ $9 = $27,000)+(6,000 units @ $10 = $60,000) = $87,000.E7–7. (continued)Req. 1 (continued)(4) Cost of goods sold (10,000 units sold):Case A FIFO:(3,000 units @ $9 = $27,000) +(7,000 units @ $10 = $70,000) = $97,000Case B LIFO:(7,000 units @ $15 = $105,000) +(3,000 units @ $10 = $30,000) = $135,000Req. 2Comparison of AmountsCase A Case BFIFO LIFOPretax Income $208,000 $170,000Difference $38,000Ending Inventory 125,000 87,000Difference 38,000The above tabulation demonstrates that the pretax income difference between the two cases is exactly the same as the inventory difference. Differences in inventory have a dollar-for-dollar effect on pretax income.Req. 3LIFO may be preferred for income tax purposes because it reports less taxable income (when prices are rising) and hence (a) reduces income tax and (b) as a result reduces cash outflows for the period.E7–8.Req. 1BECK INC.Income StatementFor the Year Ended December 31, 2015Case A Case BFIFO LIFOSales revenue1 .............................. $704,000 $704,000 Cost of goods sold:Beginning inventory ................ $ 35,000 $ 35,000Purchases .............................. 281,000 281,000Goods available for sale2 316,000 316,000 Ending inventory3 .................. 128,000 80,000Cost of goods sold4......... 188,000 236,000 Gross profit .................................. 516,000 468,000 Expenses .................................. 500,000 500,000 Pretax income ................................ $16,000 $(32,000) Computations:(1) Sales: (8,000 units @ $28) + (16,000 units @ $30) = $704,000(2) Goods available for sale (for both cases):Units Unit Cost Total Cost Beginning inventory 7,000 $5 $ 35,000Purchase, March 5, 2015 19,000 9 171,000Purchase, September 19, 2015 10,000 11 110,000 Goods available for sale 36,000 $316,000 (3) Ending inventory (36,000 available – 24,000 units sold = 12,000 units):Case A FIFO:(10,000 units @ $11 = $110,000) +(2,000 units @ $9 = $18,000) = $128,000.Case B LIFO:(7,000 units @ $5 = $35,000)+(5,000 units @ $9 = $45,000) = $80,000.E7–8. (continued)Req. 1 (continued)(4) Cost of goods sold (24,000 units sold):Case A FIFO:(7,000 units @ $5 = $35,000) +(17,000 units @ $9 = $153,000) = $188,000Case B LIFO:(10,000 units @ $11 = $110,000) +(14,000 units @ $9 = $126,000) = $236,000Req. 2Comparison of AmountsCase A Case BFIFO LIFOPretax Income $16,000 $(32,000)Difference $48,000Ending Inventory 128,000 80,000Difference 48,000The above tabulation demonstrates that the pretax income difference between the two cases is exactly the same as the inventory difference. Differences in inventory have a dollar-for-dollar effect on pretax income.Req. 3LIFO may be preferred for income tax purposes because it reports less taxable income (when prices are rising) and hence (a) reduces income tax and (b) as a result reduces cash outflows for the period.E7–9.Req. 1AverageUnits FIFO LIFO Cost Cost of goods sold:Beginning inventory .................... 2,000 $ 76,000 $ 76,000 $ 76,000Purchases................................... 8,000 320,000 320,000 320,000 Goods available for sale .. 10,000 396,000 396,000 396,000 Ending inventory* ....................... 1,800 72,000 68,400 71,280 Cost of goods sold** ........ 8,200 $324,000 $327,600 $324,720Average Income statement FIFO LIFO Cost Sales revenue ....................................... $615,000 $615,000 $615,000 Cost of goods sold................................. 324,000 327,600 324,720 Gross profit ......................................... 291,000 287,400 290,280 Expenses ......................................... 194,500 194,500 194,500 Pretax income ....................................... 96,500 92,900 95,780 Income tax expense (30%) ......... 28,950 27,870 28,734 Net income ......................................... $ 67,550 $ 65,030 $ 67,046*Ending inventory computations:FIFO: 1,800 units @ $40 = $72,000.LIFO: 1,800 units @ $38 = $68,400.Average: [(2,000 units @ $38) + (8,000 units @ $40)] ÷ 10,000 units =$396,000 ÷ 10,000 units = $39.60 per unit.$39.60 x 1,800 units = $71,280.**Cost of goods sold computations:FIFO: (2,000 units @ $38) + (6,200 units @ $40) = $324,000.LIFO: (8,000 units @ $40) + (200 units @ $38) = $327,600.Average: [(8,000 units @ $38) + (8,000 units @ $40)] =$396,000 ÷ 10,000 units = $39.60 per unit.8,200 units @ $39.60 = $324,720.Req. 2FIFO produces a more favorable (higher) net income because when prices are rising it gives a lower cost of goods sold amount. FIFO allocates the old (lower) unit costs to cost of goods sold.LIFO produces a more favorable cash flow than FIFO because, when prices are rising, it produces a higher cost of goods sold amount and lower taxable income and, therefore, lower income tax expense for the period. Cash outflow is less under LIFO by the amount of income tax reduction. LIFO causes these comparative effects because it allocates the new (higher) unit costs to cost of goods sold.E7–9. (continued)Req. 3When prices are falling, the opposite effect occurs–LIFO produces higher net income and less favorable cash flow than does FIFO.E7–10.Req. 1AverageFIFO LIFO Cost Cost of goods sold:Beginning inventory (400 units @ $28) ... $11,200 $11,200 $11,200 Purchases (475 units @ $35) ................. 16,625 16,625 16,625 Goods available for sale ......................... 27,825 27,825 27,825 Ending inventory (525 units)*.................. 18,025 15,575 16,695 Cost of goods sold (350 units)** ............. $ 9,800 $12,250 $ 11,130 *Computation of ending inventory:FIFO: (475 units x $35) + (50 units x $28) = $18,025LIFO: (400 units x $28) + (125 units x $35) = $15,575Average: [(400 units @ $28) + (475 units @ $35)] ÷ 875 units =$27,825 ÷ 875 units = $31.80 per unit.$31.80 x 525 units = $16,695.**Cost of goods sold computations:FIFO: (350 units @ $28) = $9,800.LIFO: (350 units @ $35) = $12,250.Average: [(400 units @ $28) + (475 units @ $35)] ÷ 875 units =$27,825 ÷ 875 units = $31.80 per unit.$31.80 x 350 units = $11,130.Req. 2AverageFIFO LIFO Cost Sales revenue ($50 x 350) ............................... $17,500 $17,500 $17,500 Cost of goods sold............................................. 9,800 12,250 11,130 Gross profit ..................................................... 7,700 5,250 6,370 Expenses ..................................................... 1,700 1,700 1,700 Pretax income ................................................... $ 6,000 $ 3,550 $ 4,670E7–10. (continued)Req. 3Ranking in order of favorable cash flow: The higher rankings are given to the methods that produce the lower income tax expense because the lower the income tax expense the higher the cash savings.(1) LIFO–produces the lowest pretax income, hence the lowest amount of cash to bepaid for income tax.(2) Weighted average–produces next lower pretax income.(3) FIFO–produces the highest pretax income and as a result the highest income tax.This result causes the lowest cash savings on income tax.The above comparative effects occurred because prices were rising. If prices were falling the three methods would have produced the opposite ranking.。

financial accounting robert中文版 -回复

financial accounting robert中文版-回复什么是财务会计？（What is financial accounting?）财务会计是一种会计学分支，主要关注企业的财务数据和信息处理。

它提供了管理层、投资者、债权人和其他利益相关方所需的关于企业财务状况和业绩的可靠信息。

财务会计有几个主要目标。

首先，它旨在提供关于企业财务状况的准确和全面的信息。

该信息帮助各方了解企业的收入、支出、资产和负债等重要指标。

其次，财务会计还要提供有关企业经营业绩的信息，包括销售收入、利润和现金流量等。

最后，财务会计帮助检查企业的合规性，确保其遵守法律、法规和会计准则。

财务会计的核心概念是“会计周期”（accounting cycle）。

会计周期由一系列步骤组成，用于处理和报告企业的财务数据。

以下是财务会计的关键步骤：1. 识别和记录交易：首先，财务会计通过识别和记录企业的交易来开始。

这些交易可能包括销售产品、购买材料、支付工资等。

2. 准备原始账目：在这一步骤中，会计师将交易的细节记录在原始账目中。

原始账目包括会计方程中的资产、负债和所有者权益项。

3. 进行分类和分析：财务会计对原始账目进行分类和分析，将交易归类到不同的财务报表项目中。

这些项目包括资产、负债、所有者权益、收入和费用。

4. 编制财务报表：根据分类和分析的结果，财务会计编制企业的财务报表。

常见的财务报表包括资产负债表、利润表和现金流量表。

5. 审核财务报表：企业的财务报表需要经过外部会计师事务所的审计，以确保其准确性和可靠性。

审计过程包括对企业的账目、凭证和其他相关文件的审查。

6. 报告和分析：最后，财务会计将企业的财务报表通过适当的方式向利益相关方进行报告。

这些报告可以帮助投资者、债权人和管理人员评估企业的财务状况和业绩，并做出相应的决策。

财务会计是企业管理和决策的重要工具。

通过提供准确和可靠的财务信息，它帮助各方了解企业的财务状况和业绩情况，并帮助他们做出明智的决策。

西方财务会计第二章

续
• （2）根据账户的性质及经济业务的具体内容，运用借贷记账法的记账规则确定应借记和应贷记的方向及其金额称为“编制会计分录”（Journalizing） • 会计分录
• 借：账户名称 • 贷：账户名称 ××× ×××
续
二、日记账普通日记账（General journal） 1、日期栏：指明分录的日期（年月日） 2、摘要栏：登记有关借、贷方账户名称及业务的扼要说明 • 3、金额栏：登记借方金额和贷方金额，每笔分录的借、贷方总额应该相等 • 4、过账记号栏：标明相应分类账的编号及过账记号 • • • •
借方（左）账户名称贷方（右）
“T”型账户（T—accounts）
续
• 三、借贷记账法的记账规则 • 复试记账法 • 借贷记账符号 • 记账规则：“有借必有贷，借贷必相等” • 具体表述为： 1、每一笔经济业务将以相等的金额至少同时记入一个账户的借方和另一个对应账户的贷方。 2、资产和费用类项目的增加额记入其账户的借方，减少额记入贷方。
表 2-1 某类项目的变动资产增加负债减少所有者权益减少收入减少费用增加
五类会计要素之间增减变动的对应关系表可能引起对应项目的变动资产减少负债增加所有者权益增加收入增加费用减少
续
• 复式记账（double-entry bookkeeping）
– 任何一项经济业务的发生，必然在会计恒等式中导致双重影响，引起两个或两个以上的项目发生变化，且变化金额相等。对发生的经济业务进行记录时，要同时在两个或两个以上的相关项目中记录，且记录的金额相等，即复式记账
续
• 账户的结构 • 每个项目在数量方面的变动只有增加和减少两种情况，因此，每个账户在结构上也分为左右两方，一方记增加，一方记减少 • 账户的左方称为“借方”（Debit，Dr.） • 账户的右方称为“贷方”（Credit，Cr.）

会计学原理知识点归纳(第1-6章)

会计学原理知识点归纳（第一、二章）班级：13国会2班助教：席梦娇第一章知识点梳理1.accounting：熟记定义ers of accounting information：external users：例如…（主要使用financial accounting）internal users：例如…（主要使用managerial accounting）3.fundamentals of accounting（1）GAAP：two organizations to establish GAAP private group：FASBgovernment group：SEC（2）IFRS：issued by IASB< international accounting standard aboard> （3）accounting principles：熟记四条principles的定义（4）accounting assumptions：熟记四条assumptions的定义，了解business entities的分类4.accounting equation：重点掌握5.financial statements：熟记四表一注的构成及编制顺序第二章知识点梳理：1.source documents：熟记定义2.account、general ledger、T-account ：熟记书写格式3.double-entry accounting：注意理解（每一笔分录有Dr.必有Cr.，Dr. Cr.必相等）4.recording process：analyzing journals post to ledger trial balance5.preparing trial balance：重点掌握编制步骤Chapter 31.accounting period：常用的几种会计分期2.accrual basis VS cash basis：熟记定义，常考点，可能出名词解释。

会计学原理FinancialAccountingbyRobertLibby第八版第十一

会计学原理FinancialAccountingbyRobertLibby第八版第十一Chapter 11 - Reporting and Interpreting Owners’ EquityChapter 11Reporting and Interpreting Owners’ Equity__ TO __NS1. A corporation is a separate legal entity (authorized by law to operate as an individual).It is owned by a number of persons and/or entities whose ownership is evidenced by shares of capital stock. Its primary advantages are: (a) transferability of ownership, (b) limited liability to the owners, and (c) the ability to accumulate large amounts of resources. 2. The charter of a corporation is a legal document from the state that authorizes itscreation as a separate legal entity. The charter specifies the name of the entity, its purpose, and the kinds and number of shares of capital stock it can issue. 3. (a) Authorized capitalstock―the maximum number of shares of stock that can be sold and issued as specified in the charter of the corporation.(b) Issued capital stock―the total number of shares of capital stock that havebeen issued by the corporation at a particular date. (c) Outstanding capital stock―the number of shares currently owned by thestockholders.4. Common stock―the usual or normal stock of the corporation. It is the voting stockand generally ranks after the preferred stock for dividends and assets distributed upon dissolution. Often it is called the residual equity. Common stock may be either par value or no-par value.Preferred stock―when one or more additional classes of stock are issued, the additional classes are called preferred stock. Preferred stock has modifications that make it different fromcommon stock. Generally, preferred stock has both favorable and unfavorable features in comparison with common stock. Preferred stock usually is par value stock and usually specifies a dividend rate such as D6% preferred stock.‖Chapter 11 - Reporting and Interpreting Owners’ Equity5. Par value is a nominal per share amount established for the common stock and/orpreferred stock in the charter of the corporation, and is printed on the face of each stock certificate. The stock that is sold by a corporation to investors above par value is said to have sold at a premium, while stock that is sold below par is said to have sold at a discount. The laws of practically all states forbid the initial sale of stock by a corporation to investors below par value. No-par value stock does not have an amount per share specified in the charter. As a consequence, it may be issued at any price without involving a discount or a premium. It avoids giving the impression of a value that is not present. 6. The usual characteristics of preferred stock are: (1) dividend preferences, (2) conversion privileges, (3) asset preferences, and (4) nonvoting specifications. 7. The two basic sources of stockholders’ equity are:Contributed capital―the amount invested by stockholders by purchase from the corporation of shares of stock. It is comprised of two separate elements: (1) the par or stated amount derived from the sale of capital stock (common or preferred) and(2) the amount received in excess of par or stated value.Retained earnings―the accumulated amount of all ne t income since the organization of the corporation, less losses and less the accumulated amount of dividends paid by the corporation since organization.8. Stockholders’ equity is accounted for in terms of source. This means that severalaccounts are maintained for the various sources of stockholders’ equity, such as common stock, preferred stock, contributed capital in excess of par, and retained earnings. 9. Treasury stock is a corporation’s own capital stock that was sold (issued) andsubsequently reacquired by the corporation. Corporations frequently purchase shares of their own capital stock for sound business reasons, such as to obtain shares needed for employees’ bonus plans, to influence the market price of the stock, to increase earnings per share amounts, and to have shares on hand for use in the acquisition of other companies. Treasury stock, while held by the issuing corporation, confers no voting, dividend, or other stockholder rights. 10. Treasury stock is reported on the balance she et under stockholders’ equity as adeduction; that is, as contra stockholders’ equity. Any Dgain or loss‖ on treasury stock that has been sold is reported on the financial statements as an addition to contributed capital if a gain; if a loss, it is deducted from any previous contributed capital, or otherwise from retained earnings.Chapter 11 - Reporting and Interpreting Owners’ Equity11. The two basic requirements to support a cash dividend are: (1) cash on hand or theability to obtain cash sufficient to pay the dividend and (2) a sufficient balance in retained earnings, because the dividend represents a return of earnings to the stockholders. A cash dividend reduces both the assets of a corporation and stockholders’ equity by the amount o f the dividend. 12. Cumulative preferred stock has a dividend preference such that, should thedividends on the preferred stock for any year, or series of years, not be paid, dividends cannot be paid to the common stockholders until all such dividends in arrears are paid to the preferred stockholders. Noncumulative preferred stock does not have this preference; therefore, dividends not paid in past periods will never be paid to the preferred stockholders. 13. A stockdividend involves the issuance to the stockholders of a dividend in thecorporation’s own stock (rather than cash). A stock dividend is significantly different from a cash dividend in that the corporation does not disburse any assets, while in the case of a cash dividend, cash is decreased by the amount of the dividend.A cash dividend also reduces total stockholders’ equity by the amount of the dividend. In contrast, a stock dividend does not change total stockholders’ equity. 14. The primary purposes for issuing a stock dividend are: (1) to maintain dividendconsistency; that is, to pay dividends each year either in cash or in capital stock, and (2) to capitalize retained earnings; that is, a stock dividend requires a transfer from the Retained Earnings account to the permanent contributed capital accounts for the amount of the dividend. Although this transfer does not change stockholders’ equity in total, it does cause a shift from retained earnings to contributed capital. 15. When a dividend is declared and paid, the three important dates are:Declaration date―the date on which the board of directors votes the dividend. In the case of a cash dividend, a dividend liability comes into existence on this date and must be recordedas a debit to Retained Earnings and as a credit to Dividends Payable.Date of record―this date usually is about one month after the date of declaration. It is the date on which the corporation extracts from its stockholders’ records the list of individuals owning shares. The dividend is paid only to those names listed on the record date. No entry in the accounts is made on this date.Date of payment―the date on which the cash is disbursed to pay the dividend. It follows the date of record as specified in the dividend announcement. The entry to record the cash disbursement for the dividend is a debit to Dividends Payable and a credit to Cash.Chapter 11 - Reporting and Interpreting Owners’ Equity16. Retained earnings is the accumulated amount of all net income of the corporationless all losses and less the accumulated amount of all dividends declared to date. The primary components of retained earnings are: beginning balance, plus net income, less net losses, minus dividends declared, equals the ending balance.__ TO __E CHOICE1. c) 6. b)2. d) 7. c)3. b) 8. c)4. a) 9. d)5. c) 10. a)Chapter 11 - Reporting and Interpreting Owners’ EquityAuthors’ Recommended Solution Time(Time in minutes)students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time to discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.Chapter 11 - Reporting and Interpreting Owners’ EquityMINI- __ESM11C1.Stockholders may:a) Vote in the stockholders’ meeting (or by proxy) on major issues concerning management of the corporation. b) Participate proportionately with other stockholders in the distribution of the corporation’s profits. c) Share proportionately with other stockholders in the distribution of corporate assets upon liquidation.Being able to vote is the most important of the rights because this ensures that the owners have an input at the stockholders’ meeting and some control of the management of the corporation, thus enabling them to protect their rights as stockholders. M11C2.Unissued shares = 90,000 (268,000 C 178,000) M11C3.Cash (170,000 $21) (+A) ...........................................3,570,000Common Stock (170,000 $1) (+SE) ......................Capital in Excess of Par (+SE) .................................The journal entry would be different if the par value were $2: Cash (170,000 $21) (+A) ...........................................3,570,000Common Stock (170,000 $2) (+SE) ......................Capital in Excess of Par (+SE) .................................340,000 3,230,000170,000 3,400,000Chapter 11 - Reporting and Interpreting Owners’ EquityM11C4.Common stock is the basic voting stock issued by a corporation. It ranks after preferred stock for dividends and assets distributed upon liquidation of thecorporation. The dividend rate for common stock is determined by the board of directors, and is based on the company’s profitability. The dividend rate forpreferred stock is fixed by a contract. Common stock has more potential for growth than preferred stock if the company is profitable. On the other hand, the investor may lose more money with common stock than with preferred stock if the company is not profitable.Usually, It is advisable to invest in the common stock if you believe the company will be profitable. Common stock will receive a higher return on the $100,000 than preferred stock would.Chapter 11 - Reporting and Interpreting Owners’ EquityM11C7.April 15:Retained Earnings (-SE) .............................................. Dividends Payable (+L) ............................................June 14:Dividends Payable (-L) ................................................. Cash (-A) ..................................................................65,00065,00065,00065,000M11C10.Retained Earnings (-SE) .............................................. Common Stock (+SE) ..............................................800,000800,000Chapter 11 - Reporting and Interp reting Owners’ Equity__ESE11C1.Computation of End of Year Balance for Treasury Stock:Beginning balance Net increase307,532,841 383,407,665Ending balanceComputation of Shares Outstanding: E11C2.Req. 1 The number of authorized shares is specified in the corporate charter: 300,000. Req. 2 Issued shares are the sharessold to the public: 160,000 Req. 3Issued shares 160,000 Treasury stockIssued shares Treasury stock2,109,316,331 1,725,908,666Shares OutstandingOutstanding shares 135,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11C3. Req. 1Stockholders’ EquityContributed capital: Preferred stock, authorized 4,000 shares, issued and outstanding, 3,000 shares ...................................................... $ 24,000 Common stock, authorized 103,000 shares,issued and outstanding, 20,000 shares .................................................... 200,000 Capital in excess of par, preferred .............................................................. 36,000 Capital in excess of stated value, no-par common ..................................... 120,000 Total contributed capital .......................................................................... 380,000 Retained earnings .......................................................................................... 60,000 Total Stockholders’ Equity .......................................................................Req. 2The answer would depend on the profitability of the company and the stability of its earnings. The preferred stock has a 9% dividend rate. If the company earns more than 9%, the additional earnings would accrue to the current stockholders. If the company earns less than 9%, it would pay a higher rate to the preferred stockholders. E11C4.Req. 1 ($30 x 90,000 shares) - $1,600,000 = $1,100,000 Req.2 $900,000 - $1,000,000 + $800,000 = $700,000 Req.3 90,000 shares C 80,000 shares = 10,000 shares Req.4 EPS = $1,000,000 80,000 = $12.50Chapter 11 - Reporting and Interpreting Owners’ EquityE11C5.Req. 1a. Cash (5,600 shares x $20) (+A) ............................................ 112,000 Common stock (5,600 shares x $10) (+SE) ...................... Capital in excess of par, common stock (+SE) .................. Sold common stock at a premium.b.Cash (1,000 shares x $25) (+A) ............................................ Common stock (1,000 shares x $10) (+SE) ...................... Capital in excess of par, common stock (+SE) .................. Sold common stockat a premium.25,00056,000 56,000 10,000 15,000Req. 2Stockholders’ EquityContributed capital: Common stock, par $10, authorized 11,500 shares, outstanding 6,600 shares .................................................................... $ 66,000 Contributed capital in excess of par ........................................................ 71,000 Total contributed capital .......................................................................... 137,000 Retained earnings ...................................................................................... 12,000 Stockholders’ equity ...................................................................................Chapter 11 - Report ing and Interpreting Owners’ EquityE11C6. Req. 1Req. 2(Note that this solution is based on the number of Class A common shares that areoutstanding. We elect not to include the Class B shares because they are owned by the Dillard family. Usually, students do not question this assumption but when they do, it permits usto discuss reasons for issuing different types of common stock. In this case, owners of Class B shares are permitted to elect two-thirds of the board of directors, effectively letting the founding family maintain control of a public company). Number of shares outstanding 2022年: 118,529,925 shares issued minus 73,099,319 Number of shares outstanding 2022年: 117,706,523 shares issued minus 61,740,439 Req. 3(In thousands) Retained earnings for 2022年: $3,107,344minusnet income for 2022年$463,909 plus dividends for 2022年$10,002 = $2,653,437 Req. 4(thousand). Req. 5Treasury stock transactions decreased stockholders’ equity by $490,786 (thousand) ($1,846,312 - $1,355,526). Req. 6 For 2022年, treasury stock cost per share: $1,846,312 (thousand) ÷ 73,099,319 shares =Chapter 11 - Reporting and Interpreting Owners’ EquityE11C7.Req. 1a. Cash (50,000 shares x $50) (+A) .......................................... 2,500,000 Common stock (50,000 shares x $2) (+SE) ...................... 100,000 Capital in excess of par, common stock (+SE) ..................2,400,000 Sold common stock at a premium. b.Treasury stock (2,000 shares x $52) (+XSE, -SE) ................ Cash (-A) ........................................................................... Bought treasury stock.104,000104,000Req. 2Stockholders’ EquityContributed capital: Common stock, par $2, authorized 80,000 shares, issued 50,000 shares .......................................................................... $ 100,000 Contributed capital in excess of par ........................................................ 2,400,000 Total contributed capital .......................................................................... 2,500,000 Treasury stock............................................................................................ (104,000 ) Stockholders’ equity ................................................................................... E11C8.Shareholders’ equity (deficit) in thousands:Common stock, par value $.01 per share; 100,000,000 shares authorized, 33,981,509 shares issued and outstanding at December 31, 2022年, 34,150,389 shares issued and outstandingat December 31, 2022年Additional paid-in capital Accumulated deficitTotal shareholders’ equity2022年2022年340 342 198,304 200,524 (118,282 ) (98,733 ) 80,362 102,133Chapter 11 - Reporting and Interpreting Owners’ EquityE11C9.Stockholders’ EquityContributed capital: Preferred stock, 8%, par $50, authorized 59,000 shares, issued and outstanding, 20,000 shares ............................................... $1,000,000 Common stock, par $10, authorized 98,000 shares, issued, 78,000 shares ......................................................................... 780,000 Capital in excess of par, preferred stock ................................................. 600,000 Capital in excess of par, common stock .................................................. 780,000 Treasury stock ..................................................................................... (80,000) Retained earnings* ......................................................................................... 160,000 Total stockholders’ equity........................................................................ *($210,000 C $50,000 = $160,000.) E11C10.a. Cash (20,000 shares x $20) (+A) .......................................... 400,000 Common stock, no-par (+SE) ............................................ .b. Cash (6,000 shares x $40) (+A) ............................................ 240,000 Common stock, no-par (+SE) ...........................................c.Cash (7,000 shares x $30) (+A) ............................................ 210,000 Preferred stock (7,000 shares x $10) (+SE) ...................... Capital in excess of par, preferred (+SE) ..........................400,000 240,000 70,000 140,000Req. 2Yes, it is ethical as long as there is a full disclosure of relevant information. In any arm’slength transaction, an informed buyer will pay the market value of the stock.Chapter 11 - Reporting and Interpreting Owners’ EquityE11C11. Req. 1Number of preferred shares issued: $100,000 Req. 2Number of preferred shares outstanding: 10,000 shares issued minus 500 shares held Req. 3Average sales price per share of preferred stock when issued: ($100,000 + $15,000) ÷ Req. 4Treasury stock transactions decreased stockholders’ equity by $8,000 (same as the decrease in corporate resources in 4 above). Req. 6Treasury stock cost per share: $9,500 ÷Req. 7Req. 8Issue price of common stock $600,000 ÷Chapter 11 - Reporting and Interpreting Owners’ EquityE11C12. Req. 1The number of shares that have been issuedis computed by dividing the common stock account ($4,008 million) by the par value of the shares ($1 per share) or approximately 4,008,000,000 shares. Req. 2Retained earnings end of 2022年 ............ $70,682,000,000 Net income for 2022年 ............................ 10,756,000,000 Dividends for 2022年 ............................... (5,811,600,000 ) Retained earnings end of 2022年 ............ $75,626,400,000The amount of retained earnings is an estimate because we do not know the exactnumber of shares outstanding (because we do not know the number of shares in treasury stock). This number is needed todetermine the amount of dividends paid during 2022年. We based the dividends on the estimate calculated in the previous requirement.E11C13.The treasury stock account is a contra equity account, meaning that it subtracts from the total stockholders’ equity. Cash also decreases on the balance sheet by the same amount.Req. 2Many companies repurchase common stock in order to develop an employee bonus plan that provides workers with shares of the company’s stock as part of their compensation. Because of SEC regulations concerning newly issued shares, companies find it cheaper to give their employees shares of stock that were purchased from stockholders than to issue new shares. In this case, the company mentions the goal of enhancing shareholders’ value. If the company main tains its current level of income, earnings per share will increase with fewer shares outstanding. Themanagement expects that the increase in EPS will be reflected in an increase in stock price. Req. 3Shares that are held in treasury stock do not participate individend payments. As a result, the purchase of treasury stock will reduce the amount of dividends that the company must pay in future years.Chapter 11 - Reporting and Interpreting Owners’ EquityE11C14. Req. 1Stockholders’ Eq uityContributed capital:Common stock, authorized 100,000 shares, issued 34,000 shares, ofwhich 2,000 shares are held as treasury stock .................................. Capital in excess of par ........................................................................ Total contributed capital .................................................................... Retained earnings ................................................................................... Total .................................................................................................. Less: Cost of treasury stock ................................................................. Total Stockholders’ Equity Req. 2The dividend yield ratio is 2.24% ([$16,000 32,000 shares] $22.29). While this yield seems small, it is a typical return on common stock. Investors receive a return from both dividends and stock price appreciation.Treasury stock does not receive dividends. As a result, dividends should be paid on 32,000 shares. E11C15.Req. 1a. Treasury stock (200 shares x $20) (+XSE, -SE) ................... Cash (-A) ........................................................................... Bought treasury stock.b.Cash (40 shares x $25) (+A) ................................................. Treasury stock(40 shares x $20) (-XSE, +SE) .................. Capital in excess of par (+SE) ........................................... Sold treasury stock.Capital in excess of par (-SE) ............................................... Treasury stock (30 shares x $20) (-XSE, +SE) ................ Sold treasury stock.4,0001,000450 1504,000800 200600$680,000 163,000 843,000 89,000 932,000 25,000 c. Cash (30 shares x $15) (+A) .................................................Req. 2It is not possible to make a Dprofit‖ or Dloss‖ on treasury stock transactions. Therefore, these transactions do not affect the income statement.Chapter 11 - Reporting and Interpreting Ow ners’ EquityE11C16.Req. 1 Feb. 1:Treasury stock, common (160 shares x $20) (+XSE, -SE) Cash (-A) ........................................................................July 15:Cash (80 shares x $21) (+A) ............................................. Treasury stock, common (-XSE, +SE) ........................... Capital in excess of par (+SE) .......................................Sept. 1:Cash (50 shares x $19) (+A) ............................................. Capital in excess of par (-SE) ............................................ Treasury stock, common (50 shares x $20) (-XSE, +SE) . Req. 2Dividends are not paid on treasury stock. Therefore, the amount of total cash dividends paid is reduced when treasury stock is purchased. Req. 3The sale of treasury stock for more or less than its original purchase price does not have an impact on net income. Thetransaction affects only balance sheet accounts. The cash received from the sale of treasury stock is a cash inflow which would affect the Statement of Cash Flows in the financing activities section.3,2001,680950 503,2001,600 80 1,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11C17. Req. 1Case 1: When companies unexpectedly announce increases in dividends, stock prices typically increase. Depending on course objective, the instructor may want to discuss research in finance concerning dividend policy.Case 2: Stock price is based on expectations. If the increase in operatingperformance was not expected, the stock price should increase. It is not necessary to increase dividends to have a favorable stock price reaction.Case 3: Stock dividends do not provide any economic valuebut they may have a signal effect and are often associated with increases in cash dividends. As a result, stock dividends do not appear to directly cause an increase in stock price but are often associated with factors that do impact favorably on price.Req.2Stock prices react to underlying economic events and not changes in reporting methods, per se. Markets are relatively effective in recognizing the differencebetween profits generated by operations and profits generated by the use of liberal accounting policies.。

会计学原理Financial Accounting by Robert Libby第八版第十一章答案

Chapter 11 - Reporting and Interpreting Owners’ EquityChapter 11Reporting and Interpreting Owners’ EquityANSWERS TO QUESTIONS1. A corporation is a separate legal entity (authorized by law to operate as an individual).It is owned by a number of persons and/or entities whose ownership is evidenced by shares of capital stock. Its primary advantages are: (a) transferability of ownership, (b) limited liability to the owners, and (c) the ability to accumulate large amounts of resources.2. The charter of a corporation is a legal document from the state that authorizes itscreation as a separate legal entity. The charter specifies the name of the entity, its purpose, and the kinds and number of shares of capital stock it can issue.3. (a) Authorized capital stock—the maximum number of shares of stock that can besold and issued as specified in the charter of the corporation.(b) Issued capital stock—the total number of shares of capital stock that havebeen issued by the corporation at a particular date.(c) Outstanding capital stock—the number of shares currently owned by thestockholders.4. Common stock—the usual or normal stock of the corporation. It is the voting stockand generally ranks after the preferred stock for dividends and assets distributed upon dissolution. Often it is called the residual equity. Common stock may be either par value or no-par value.Preferred stock—when one or more additional classes of stock are issued, the additional classes are called preferred stock. Preferred stock has modifications that make it different fromcommon stock. Generally, preferred stock has both favorable and unfavorable features in comparison with common stock. Preferred stock usually is par value stock and usually specifies a dividend rate such as ―6% preferred stock.‖Chapter 11 - Reporting and Interpreting Owners’ Equity5. Par value is a nominal per share amount established for the common stock and/orpreferred stock in the charter of the corporation, and is printed on the face of each stock certificate. The stock that is sold by a corporation to investors above par value is said to have sold at a premium, while stock that is sold below par is said to have sold at a discount. The laws of practically all states forbid the initial sale of stock by a corporation to investors below par value. No-par value stock does not have an amount per share specified in the charter. As a consequence, it may be issued at any price without involving a discount or a premium. It avoids giving the impression of a value that is not present.6. The usual characteristics of preferred stock are: (1) dividend preferences, (2)conversion privileges, (3) asset preferences, and (4) nonvoting specifications.7. The two basic sources of stockholders’ equity are:Contributed capital—the amount invested by stockholders by purchase from the corporation of shares of stock. It is comprised of two separate elements: (1) the par or stated amount derived from the sale of capital stock (common or preferred) and(2) the amount received in excess of par or stated value.Retained earnings—the accumulated amount of all net income since the organization of the corporation, less losses and less the accumulated amount of dividends paid by the corporation since organization.8. Stockholders’ equity is accounted for in terms of source. This means that severalaccounts are maintained for the various sources of stockholders’equity, such as common stock, preferred stock, contributed capital in excess of par, and retained earnings.9. Treasury stock is a corporation’s own capital stock that was sold (issued) andsubsequently reacquired by the corporation. Corporations frequently purchase shares of their own capital stock for sound business reasons, such as to obtain shares needed for employees’ bonus plans, to influence the market price of the stock, to increase earnings per share amounts, and to have shares on hand for use in the acquisition of other companies. Treasury stock, while held by the issuing corporation, confers no voting, dividend, or other stockholder rights.10. Treasury stock is reported on the balance sheet under stockholders’equity as adeduction; that is, as contra stockholders’equity. Any ―gain or loss‖ on treasury stock that has been sold is reported on the financial statements as an addition to contributed capital if a gain; if a loss, it is deducted from any previous contributed capital, or otherwise from retained earnings.Chapter 11 - Reporting and Interpreting Owners’ Equity11. The two basic requirements to support a cash dividend are: (1) cash on hand or theability to obtain cash sufficient to pay the dividend and (2) a sufficient balance in retained earnings, because the dividend represents a return of earnings to the stockholders. A cash dividend reduces both the assets of a corporation and stockholders’ equity by the amount of the dividend.12. Cumulative preferred stock has a dividend preference such that, should thedividends on the preferred stock for any year, or series of years, not be paid, dividends cannot be paid to the common stockholders until all such dividends in arrears are paid to the preferred stockholders. Noncumulative preferred stock does not have this preference; therefore, dividends not paid in past periods will never be paid to the preferred stockholders.13. A stock dividend involves the issuance to the stockholders of a dividend in thecorporation’s own stock (rather than cash). A stock dividend is significantly diffe rent from a cash dividend in that the corporation does not disburse any assets, while in the case of a cash dividend, cash is decreased by the amount of the dividend. A cash dividend also reduces total stockholders’ equity by the amount of the dividend.In contrast, a stock dividend does not change total stockholders’ equity.14. The primary purposes for issuing a stock dividend are: (1) to maintain dividendconsistency; that is, to pay dividends each year either in cash or in capital stock, and (2) to capitalize retained earnings; that is, a stock dividend requires a transfer from the Retained Earnings account to the permanent contributed capital accounts for the amount of the dividend. Although this transfer does not change stockholders’ equity in total, it does cause a shift from retained earnings to contributed capital. 15. When a dividend is declared and paid, the three important dates are:Declaration date—the date on which the board of directors votes the dividend. In the case of a cash dividend, a dividend liability comes into existence on this date and must be recorded as a debit to Retained Earnings and as a credit to Dividends Payable.Date of record—this date usually is about one month after the date of declaration. It is the date on which the corporation extracts from its stockholders’ records the list of individuals owning shares. The dividend is paid only to those names listed on the record date. No entry in the accounts is made on this date.Date of payment—the date on which the cash is disbursed to pay the dividend. It follows the date of record as specified in the dividend announcement. The entry to record the cash disbursement for the dividend is a debit to Dividends Payable anda credit to Cash.Chapter 11 - Reporting and Interpreting Owners’ Equity16. Retained earnings is the accumulated amount of all net income of the corporationless all losses and less the accumulated amount of all dividends declared to date.The primary components of retained earnings are: beginning balance, plus net income, less net losses, minus dividends declared, equals the ending balance.ANSWERS TO MULTIPLE CHOICE1. c)2. d)3. b)4. a)5. c)6. b)7. c)8. c)9. d) 10. a)Chapter 11 - Reporting and Interpreting Owners’ EquityAuthors’ Recommended Solution Time(Time in minutes)students will need to complete the assignment. As with any open-ended project, it is possible for students to devote a large amount of time to these assignments. While students often benefit from the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can reduce student frustration and anxiety by making your expectations clear. For example, when our goal is to sharpen research skills, we devote class time to discussing research strategies. When we want the students to focus on a real accounting issue, we offer suggestions about possible companies or industries.Chapter 11 - Reporting and Interpreting Owners’ EquityMINI- EXERCISESM11–1.Stockholders may:a) Vote in the stockholders’ meeting (or by proxy) on major issues concerningmanagement of the corporation.b) Participate proportionately with other stockholders in the distribution of thecorporation’s profits.c) Share proportionately with other stockholders in the distribution of corporateassets upon liquidation.Being able to vote is the most important of the rights because this ensures that the owners have an input at the stockholders’ meeting and some control of the management of the corporation, thus enabling them to protect their rights as stockholders.M11–2.Unissued shares = 90,000 (268,000 – 178,000)M11–3.Cash (170,000 ⨯ $21) (+A) ...........................................3,570,000Common Stock (170,000 ⨯ $1) (+SE) ......................170,000 Capital in Excess of Par (+SE) .................................3,400,000 The journal entry would be different if the par value were $2:Cash (170,000 ⨯ $21) (+A) ...........................................3,570,000Common Stock (170,000 ⨯ $2) (+SE) ......................340,000 Capital in Excess of Par (+SE) .................................3,230,000Chapter 11 - Reporting and Interpreting Owners’ EquityM11–4.Common stock is the basic voting stock issued by a corporation. It ranks afterpreferred stock for dividends and assets distributed upon liquidation of thecorporation. The dividend rate for common stock is determined by the board of directors, and is based on the company’s profitability. The dividend rate forpreferred stock is fixed by a contract. Common stock has more potential for growth than preferred stock if the company is profitable. On the other hand, the investor may lose more money with common stock than with preferred stock if the company is not profitable.Usually, It is advisable to invest in the common stock if you believe the company will be profitable. Common stock will receive a higher return on the $100,000 than preferred stock would.Chapter 11 - Reporting and Interpreting Owners’ EquityM11–7.April 15:Retained Earnings (-SE) ..............................................65,000Dividends Payable (+L) ............................................65,000 June 14:Dividends Payable (-L) .................................................65,000Cash (-A) ..................................................................65,000M11–10.Retained Earnings (-SE) ..............................................800,000Common Stock (+SE) ..............................................800,000Chapter 11 - Reporting and Interpreting Owners’ EquityEXERCISESE11–1.Computation of End of Year Balance for Treasury Stock:Beginning balance 307,532,841Net increase 75,874,824Ending balance 383,407,665Computation of Shares Outstanding:Issued shares 2,109,316,331Treasury stock ( 383,407,665)Shares Outstanding 1,725,908,666E11–2.Req. 1 The number of authorized shares is specified in the corporate charter: 300,000. Req. 2 Issued shares are the shares sold to the public: 160,000Req. 3 Issued shares 160,000Treasury stock (25,000)Outstanding shares 135,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11–3.Req. 1Stockholders’ EquityContributed capital:Preferred stock, authorized 4,000 shares,issued and outstanding, 3,000 shares ...................................................... $ 24,000 Common stock, authorized 103,000 shares,issued and outstanding, 20,000 shares .................................................... 200,000 Capital in excess of par, preferred .............................................................. 36,000 Capital in excess of stated value, no-par common ..................................... 120,000 Total contributed capital .......................................................................... 380,000 Retained earnings .......................................................................................... 60,000 Total Stockholders’ Equity....................................................................... $440,000 Req. 2The answer would depend on the profitability of the company and the stability of its earnings. The preferred stock has a 9% dividend rate. If the company earns more than 9%, the additional earnings would accrue to the current stockholders. If the company earns less than 9%, it would pay a higher rate to the preferred stockholders.E11–4.Req. 1 ($30 x 90,000 shares) - $1,600,000 = $1,100,000Req. 2 $900,000 - $1,000,000 + $800,000 = $700,000Req. 3 90,000 shares – 80,000 shares = 10,000 sharesReq. 4 EPS = $1,000,000 80,000 = $12.50Chapter 11 - Reporting and Interpreting Owners’ EquityE11–5.Req. 1a. Cash (5,600 shares x $20) (+A) ............................................ 112,000Common stock (5,600 shares x $10) (+SE) ...................... 56,000 Capital in excess of par, common stock (+SE) .................. 56,000 Sold common stock at a premium.b. Cash (1,000 shares x $25) (+A) ............................................ 25,000Common stock (1,000 shares x $10) (+SE) ...................... 10,000 Capital in excess of par, common stock (+SE) .................. 15,000 Sold common stock at a premium.Req. 2Stockholders’ EquityContributed capital:Common stock, par $10, authorized 11,500 shares,outstanding 6,600 shares .................................................................... $ 66,000 Contributed capital in excess of par ........................................................ 71,000 Total contributed capital .......................................................................... 137,000 Retained earnings ...................................................................................... 12,000 Stockholders’ equity ................................................................................... $149,000Chapter 11 - Reporting and Interpreting Owners’ EquityE11–6.Req. 1Common stock, class A at par value: 118,529,925 X $0.01 = $1,185 (thousand)Req. 2(Note that this solution is based on the number of Class A common shares that are outstanding. We elect not to include the Class B shares because they are owned by the Dillard family. Usually, students do not question this assumption but when they do, it permits us to discuss reasons for issuing different types of common stock. In this case, owners of Class B shares are permitted to elect two-thirds of the board of directors, effectively letting the founding family maintain control of a public company).Number of shares outstanding 2012: 118,529,925 shares issued minus 73,099,319 shares held as treasury stock = 45,430,606.Number of shares outstanding 2011: 117,706,523 shares issued minus 61,740,439 shares held as treasury stock = 55,966,084.Req. 3(In thousands) Retained earnings for 2011: $3,107,344minusnet income for 2012 $463,909 plus dividends for 2012 $10,002 = $2,653,437Req. 4As of 2012, treasury stock had decreased corporate resources by $1,846,312 (thousand).Req. 5T reasury stock transactions decreased stockholders’ equity by $490,786 (thousand) ($1,846,312 - $1,355,526).Req. 6For 2012, treasury stock cost per share: $1,846,312 (thousand) ÷ 73,099,319 shares = $25.26.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–7.Req. 1a. Cash (50,000 shares x $50) (+A) .......................................... 2,500,000Common stock (50,000 shares x $2) (+SE) ...................... 100,000 Capital in excess of par, common stock (+SE) .................. 2,400,000 Sold common stock at a premium.b. Treasury stock (2,000 shares x $52) (+XSE, -SE) ................ 104,000Cash (-A) ........................................................................... 104,000 Bought treasury stock.Req. 2Stockholders’ EquityContributed capital:Common stock, par $2, authorized 80,000 shares,issued 50,000 shares .......................................................................... $ 100,000 Contributed capital in excess of par ........................................................ 2,400,000 Total contributed capital .......................................................................... 2,500,000 Treasury stock............................................................................................ (104,000 ) Stockholders’ equity ................................................................................... $2,396,000 E11–8.Shareholders’ equity (deficit) in thousands: 2010 2011 Common stock, par value $.01 per share; 100,000,000 shares authorized,33,981,509 shares issued and outstanding at December 31, 2010,34,150,389 shares issued and outstanding at December 31, 2011 340 342 Additional paid-in capital 198,304 200,524 Accumulated deficit (118,282 ) (98,733 ) Total shareholders’ equity80,362 102,133Chapter 11 - Reporting and Interpreting Owners’ EquityE11–9.Stockholders’ EquityContributed capital:Preferred stock, 8%, par $50, authorized 59,000 shares,issued and outstanding, 20,000 shares ............................................... $1,000,000 Common stock, par $10, authorized 98,000 shares,issued, 78,000 shares ......................................................................... 780,000 Capital in excess of par, preferred stock ................................................. 600,000 Capital in excess of par, common stock .................................................. 780,000 Treasury stock ..................................................................................... (80,000) Retained earnings* ......................................................................................... 160,000 Total stockholders’ equity........................................................................ $3,240,000 *($210,000 – $50,000 = $160,000.)E11–10.Req. 1a. Cash (20,000 shares x $20) (+A) .......................................... 400,000Common stock, no-par (+SE) ............................................ 400,000 .b. Cash (6,000 shares x $40) (+A) ............................................ 240,000Common stock, no-par (+SE) ........................................... 240,000 c. Cash (7,000 shares x $30) (+A) ............................................ 210,000Preferred stock (7,000 shares x $10) (+SE) ...................... 70,000 Capital in excess of par, preferred (+SE) .......................... 140,000 Req. 2Yes, it is ethical as long as there is a fu ll disclosure of relevant information. In any arm’s length transaction, an informed buyer will pay the market value of the stock.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–11.Req. 1Number of preferred shares issued: $100,000 $10 = 10,000Req. 2Number of preferred shares outstanding: 10,000 shares issued minus 500 shares held as treasury stock = 9,500.Req. 3Average sales price per share of preferred stock when issued: ($100,000 + $15,000) ÷10,000 shares = $11.50.Req. 4Decreased corporate resources by $9,500 - $1,500 = $8,000.Req. 5Treasury stock transactions decreased stockholders’ equity by $8,000 (same as the decrease in corporate resources in 4 above).Req. 6Treasury stock cost per share: $9,500 ÷ 500 shares = $19.00.Req. 7Total stockholders’ equity: $741,000.Req. 8Issue price of common stock $600,000 ÷ 8,000 shares = $75.00.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–12.Req. 1The number of shares that have been issuedis computed by dividing the common stock account ($4,008 million) by the par value of the shares ($1 per share) or approximately 4,008,000,000 shares.Req. 2Retained earnings end of 2011 ............ $70,682,000,000Net income for 2012 ............................ 10,756,000,000Dividends for 2012 ............................... (5,811,600,000 )Retained earnings end of 2012 ............ $75,626,400,000The amount of retained earnings is an estimate because we do not know the exact number of shares outstanding (because we do not know the number of shares in treasury stock). This number is needed to determine the amount of dividends paid during 2012. We based the dividends on the estimate calculated in the previous requirement.E11–13.The treasury stock account is a contra equity account, meaning that it subtracts from the total stockholders’ equity. Cash also decreases on the balance sheet by the same amount.Req. 2Many companies repurchase common stock in order to develop an employee bonus plan that provides workers with shares of the company’s stock as part of their compensation. Because of SEC regulations concerning newly issued shares, companies find it cheaper to give their employees shares of stock that were purchased from stockholders than to issue new shares. In this case, the company mentions the goal of enhancing shareholder s’ value. If the company maintains its current level of income, earnings per share will increase with fewer shares outstanding. The management expects that the increase in EPS will be reflected in an increase in stock price.Req. 3Shares that are held in treasury stock do not participate in dividend payments. As a result, the purchase of treasury stock will reduce the amount of dividends that the company must pay in future years.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–14.Req. 1Stockholders’ EquityContributed capital:Common stock, authorized 100,000 shares, issued 34,000 shares, ofwhich 2,000 shares are held as treasury stock .................................. $680,000 Capital in excess of par ........................................................................ 163,000 Total contributed capital .................................................................... 843,000 Retained earnings ................................................................................... 89,000 Total .................................................................................................. 932,000 Less: Cost of treasury stock ................................................................. 25,000 Total Stockholders’ Equity$907,000 Req. 2The dividend yield ratio is 2.24% ([$16,000 ÷ 32,000 shares] ÷ $22.29). While this yield seems small, it is a typical return on common stock. Investors receive a return from both dividends and stock price appreciation.Treasury stock does not receive dividends. As a result, dividends should be paid on 32,000 shares.E11–15.Req. 1a. Treasury stock (200 shares x $20) (+XSE, -SE) ................... 4,000Cash (-A) ........................................................................... 4,000 Bought treasury stock.b. Cash (40 shares x $25) (+A) ................................................. 1,000Treasury stock(40 shares x $20) (-XSE, +SE) (800)Capital in excess of par (+SE) (200)Sold treasury stock.c. Cash (30 shares x $15) (+A) (450)Capital in excess of par (-SE) (150)Treasury stock (30 shares x $20) (-XSE, +SE) (600)Sold treasury stock.Req. 2It is not possible to make a ―profit‖ o r ―loss‖ on treasury stock transactions. Therefore, these transactions do not affect the income statement.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–16.Req. 1Feb. 1:Treasury stock, common (160 shares x $20) (+XSE, -SE) 3,200Cash (-A) ........................................................................ 3,200 July 15:Cash (80 shares x $21) (+A) ............................................. 1,680Treasury stock, common (-XSE, +SE) ........................... 1,600 Capital in excess of par (+SE) (80)Sept. 1:Cash (50 shares x $19) (+A) (950)Capital in excess of par (-SE) (50)Treasury stock, common (50 shares x $20) (-XSE, +SE) 1,000.Req. 2Dividends are not paid on treasury stock. Therefore, the amount of total cash dividends paid is reduced when treasury stock is purchased.Req. 3The sale of treasury stock for more or less than its original purchase price does not have an impact on net income. The transaction affects only balance sheet accounts. The cash received from the sale of treasury stock is a cash inflow which would affect the Statement of Cash Flows in the financing activities section.Chapter 11 - Reporting and Interpreting Owners’ EquityE11–17.Req. 1Case 1: When companies unexpectedly announce increases in dividends, stock prices typically increase. Depending on course objective, the instructor may want to discuss research in finance concerning dividend policy.Case 2: Stock price is based on expectations. If the increase in operatingperformance was not expected, the stock price should increase. It is not necessary to increase dividends to have a favorable stock price reaction.Case 3: Stock dividends do not provide any economic value but they may have a signal effect and are often associated with increases in cash dividends. As a result, stock dividends do not appear to directly cause an increase in stock price but are often associated with factors that do impact favorably on price.Req.2Stock prices react to underlying economic events and not changes in reportingmethods, per se. Markets are relatively effective in recognizing the differencebetween profits generated by operations and profits generated by the use of liberal accounting policies.Chapter 11 - Reporting and Interpreting Owners’ Equity E11–18.Req. 1 Preferred(5,000Shares)Common(50,000Shares) Totala) Noncumulative:Preferred ($50,000 x 10%) ...................................... $ 5,000 $ 5,000 Balance to common ($85,000 – $5,000) ................. $80,000 80,000$ 5,000 $80,000 $85,000 b) Cumulative:Preferred, arrears ($50,000 x 10% x 2 years) ......... $ 10,000 $ 10,000 Preferred, current year ($50,000 x 10%) ................. 5,000 5,000 Balance to common ($85,000 – $10,000 – $5,000) $70,000 70,000$15,000 $70,000 $85,000Req. 2The total dividend amount and dividends per share of common stock were less underthe second assumption because the preferred stock preferences increased while at the same time the total dividend amount remained stable.Req. 3Larger total dividend distributionsare more favorable for the common stockholders.E11–19.ItemEffect of Cash Dividend (Preferred) Effect of Stock Dividend (Common)Assets –No effect on declaration date.–Decreased by the amount of thedividend ($7,200) on paymentdate. No effect because no assets are disbursed.Liabilities –Increased on declaration date($7,200).–Decreased on payment date($7,200). No effect—no entry on declaration date because no contractual liability is created (no assets are disbursed).Stockholders’equity Decreased by the amount of thedividend (retained earningsdecreased by $7,200).–Total stockho lders’ equity notchanged.–Retained earnings reduced andcontributed capital increased bysame amount ($120,000).。

1、下载文档前请自行甄别文档内容的完整性，平台不提供额外的编辑、内容补充、找答案等附加服务。
2、"仅部分预览"的文档,不可在线预览部分如存在完整性等问题,可反馈申请退款(可完整预览的文档不适用该条件!)。
3、如文档侵犯您的权益，请联系客服反馈,我们会尽快为您处理(人工客服工作时间：9:00-18:30)。

Chapter 3Operating Decisions and the Accounting SystemANSWERS TO QUESTIONS1. A typical business operating cycle for a manufacturer would be as follows: inventory ispurchased, cash is paid to suppliers, the product is manufactured and sold on credit,and the cash is collected from the customer.2. The time period assumption means that the financial condition andperformance of a business can be reported periodically, usually everymonth, quarter, or year, even though the life of the business is much longer.3. Net Income = Revenues + Gains - Expenses - Losses.Each element is defined as follows:Revenues -- increases in assets or settlements of liabilities fromongoing operations.Gains -- increases in assets or settlements of liabilities fromperipheral transactions.Expenses -- decreases in assets or increases in liabilities from ongoing operations.Losses -- decreases in assets or increases in liabilities fromperipheral transactions.4. Both revenues and gains are inflows of net assets. However, revenues occur in thenormal course of operations, whereas gains occur from transactions peripheral to the central activities of the company. An example is selling land at a price above cost (at a gain) for companies not in the business of selling land.Both expenses and losses are outflows of net assets. However, expenses occur in the normal course of operations, whereas losses occur from transactions peripheral to the central activities of the company. An example is a loss suffered from fire damage.5. Accrual accounting requires recording revenues when earned and recording expenseswhen incurred, regardless of the timing of cash receipts payments. Cash basis accounting is recording revenues when cash received and expenses when cash is paid.or is12.6.The four criteria that must be met for revenue to be recognized under the accrual basis of accounting are (1) delivery has occurred or services have been rendered, (2) there is persuasive evidenee of an arran geme nt for customer payme nt, (3) the price is fixed or determ in able, and (4) collecti on is reas on ably assured.7.The expe nse match ing prin ciple requires that expe nses be recorded whe n incurred in earning revenue. For example, the cost of inventory sold duri ng a period is recorded in the same period as the sale, not whe n the goods are produced and held for sale.8.Net in come equals reve nues minus expe nses. Thus reve nues in crease net in come and expe nses decrease net in come. Because net in come in creases stockholders ' equity, reve nues in crease stockholders ' equity and expe nses decrease it.9.Reve nues in crease stockholders ' equity and expe nses decreasestockholders ' equity. To in crease stockholders ' equity, an acco unt must be credited; to decrease stockholders ' equity, an account must be debited. Thus reve nues are recorded as credits and expe nses as debits.13. Total net profit margin ratio is calculated as Net In comeNet Sales (or Operat ing Reve nu es). The net profit margin ratio measures how much of every sales dollar is profit. An in creas ing ratio suggests that the compa ny is managing its sales and expe nses effectively.ANSWERS TO MULTIPLE CHOICE1. c2. a3. b4. b5. c6. c7. d8. b9. a10. bAuthors' Recomme nded Soluti on Time(Time in min utes)* Due to the nature of this project, it is very difficult to estimate the amount of time students willneed to complete the assignment. As with anyopen-ended project, it is possible for students to devote a large amount of time to these assig nmen ts. While stude nts ofte n ben efit from the extra effort, we find that some become frustrated by the perceived difficulty of the task.You can reduce student frustration and anxiety by making your expectations clear. For example, whe n our goal is to sharpe n research skills, we devoteclass time discuss ing research strategies. When we want the stude nts to focus on a real acco un ti ng issue, we offer suggesti ons about possible compa nies or in dustries.MINI-EXERCISESM3- 1._________________ TERM G (1)L ossesC (2)Expe nse matchi ng _____ prin ciple F (3)Reve nuesE (4)Time periodassumpti on B (5)Operat ing cycleM3- 2.Cash BasisAccrual Basis In come Stateme ntIn come Stateme ntReve nu es:Reve nu es: Cash sales$8,000 Sales to $18,000Customer deposits5,000customersExpe nses:Expe nses: Inven tory purchases 1,000 Cost of sales 9,000 Wages paid900Wages expe nse 900Utilities 300expenseNet In come$11,100Net In come$7,800M3- 4.Reve nue Acco unt AffectedAmount of Reve nue Earned in Julya. Cash (+A) ......................................................................................... 15,000Games Reve nue (+R, +SE) ........................................................................ 15,000b. Cash (+A) ........................................................................................... 3,000Acco unts Receivable (+A) ................................................................ 5,000 Sales Reve nue (+R, +SE) ............................................................................. 8,000c. Cash (+A) ........................................................................................... 4,000Acco unts Receivable ( A) .............................................................................. 4,000d. Cash (+A) ........................................................................................... 2,500Unearned Reve nue (+L) ............................................................................... 2,500 M3- 6.e. Cost of Goods Sold (+E, SE) ............................................................. 6,800Inven tory ( A) ............................................................................................ 6,800f. Accounts Payable ( - L) (800)Cash ( A) (800)g. Wages Expe nse (+E, SE) ................................................................. 3,500Cash ( A) ........................................................................................................ 3,500h. In sura nee Expe nse (+E, SE) (500)Prepaid Expe nses (+A) ....................................................................... 1,00 Cash ( A) ........................................................................................................ 1,500i. Repairs Expe nse (+E, SE) (700)Cash ( A) (700)j. Utilities Expe nse (+E, SE) (900)Acco unts Payable (+L) (900)Tran sact ion (c) results in an in crease in an asset (cash) and a decrease in an asset (acco unts receivable). Therefore, there is no net effect on assets.M3- 8.Tran sact ion (h) results in an in crease in an asset (prepaid expe nses) and adecrease in an asset (cash). Therefore, the net effect on assets is 500.Craig ' s Bowling, Inc. In come Stateme nt For the Month of July 2014Reve nu es:Games reve nue Sales reve nue Total reve nues Expe nses:Cost of goods soldUtilities expe nse Wages expe nseIn sura nee expe nse Repairs expe nse Total expe nses Net in comeM3- 10.$15,000 8,000 23,000 6,800 900 3,500 500 700 12,400 $ 10,600These results suggest that Jen ' s Jewelry Company earned approximately $ for every dollar of revenue in 2015, and over time, the ratio has improved.Jen' s has become more effective at managing sales and expe nses.Betwee n 2013 to 2014 and 2014 to 2015, sales have in creased at a lower perce ntage tha n net in come. This suggests that the compa ny has bee n more effective at con trolli ng expe nses tha n gen erat ing reve nu es.EXERCISESE3 - 1.TERM K (1) Expe nses E (2) Gai nsG (3) Reve nue realizati on prin ciple I (4) Cash basisacco unting M (5) Unearned reve nue C (6) Operati ng cycleD (7) Accrual basis acco unting F(8) Prepaid expe nsesJ (9) Reve nuesExpe nses = Net In comeL (10) Ending Reta ined Earnings =Beg inning Reta ined Earnings + Net In come DeclaredE3 - 2. Req. 1Cash BasisAccrual Basis In come Stateme ntIn come Stateme ntReve nu es:Reve nu es:Cash sales$500,000 Sales to $750,000 Customer deposits 70,000 customersNet In come$282,500 Net In come$61,870Req. 2Accrual basis financial statements provide more useful information to external users.Divide ndsExpe nses:Inven tory purchases 90,000 Wages paid 180,300 Utilities paid17,200 Expe nses:Cost of sales 485,000 Wages expe nse 184,000 Utilities19,130 expense ________Financial statements created under cash basis accounting normally postpone ., $250,000 credit sales) or accelerate ., $70,000 customer deposits) recognition of revenues and expenses long before or after goods and services are produced and delivered (until cash is received or paid). They also do not necessarily reflect all assets or liabilities of a company on a particular date.Activity Reve nue Acco unt Amount of Reve nueActivity Expe nse Acco unt Affected Amount of Expe nseE3 - 5.Bala nee In come StatemeTran sact ion (k) results in an in crease in an asset (cash) and a decrease in an asset (acco unts receivable). Therefore, there is no net effect on assets.A loss affects net in come n egatively, as do expe nses.E3 - 6.Tran sact ion (f) results in an in crease in an asset (property, pla nt, and equipme nt) and a decrease in an asset (cash). Therefore, there is no net effect on assets.E3 - 7.(in thousa nds)a. Pla nt and equipme nt (+A) (636)Cash ( A) (636)Debits equal credits. Assets in crease and decrease by the same amount.b. Cash (+A) (181)Short-term no tes payable (+L) (181)Debits equal credits. Assets and liabilities in crease by the same amount.c. Cash (+A) .......................................................................................... 10,765Acco unts receivable (+A) .................................................................. 28,558Service revenue (+R, +SE) .....................39,323 Debits equal credits. Revenue increases retained earnings (part of stockholders' equity). Stockholders' equity and assets increase by the same amount.E3 - 7. (continued)d. Acco unts payable ( L) ....................................................................... 32,074Cash ( A) ......................................................................................................... 32,074 Debits equal credits. Assets and liabilities decrease by the same amount.e. Inven tory (+A) ................................................................................... 32,305Acco unts payable (+L) ................................................................................... 32,305 Debits equal credits. Assets and liabilities in crease by the same amount.f. Wages expe nse (+E, SE) .................................................................... 3,500Cash ( A) ........................................................................................................... 3,500 Debits equal credits. Expe nses decrease reta ined earnings (part of stockholders'equity). Stockholders' equity and assets decrease by the same amount.g. Cash (+A) ........................................................................................... 39,043Acco unts receivable ( A) ................................................................... 39,043 Debits equal credits. Assets in crease and decrease by the same amount.h. Fuel expe nse (+E, SE) (750)Cash ( A) (750)Debits equal credits. Expe nses decrease reta ined earnings (part of stockholders'equity). Stockholders' equity and assets decrease by the same amount.i. Reta ined earnings ( SE) (597)Cash ( A) (597)Debits equal credits. Assets and stock holders ' equity decrease by thesame amount.j. Utilities expe nse (+E, SE) (68)Cash ( A) (55)Acco unts payable (+L) (13)Debits equal credits. Expe nses decrease reta ined earnings (part of stockholders'equity). Together, stockholders' equity and liabilities decrease by the same amount as assets.E3 - 8.Req. 1a. Cash (+A) ....................................................................... 2,300,000Short-term note payable (+L) ................................................. 2,300,000 Debits equal credits. Assets and liabilities in crease by the same amount.b. Equipme nt (+A)............................... 98,000Cash ( A) ..................................................................................... 98,000 Debits equal credits. Assets in crease and decrease by the same amount.c. Mercha ndise inven tory (+A) ................. 35,000Acco unts payable (+L) ............................................................. 35,000 Debits equal credits. Assets and liabilities in crease by the same amount.d. Repairs (or maintenan ce) expe nse (+E, SE).... 62,000Cash ( A) .................................................................................. 62,000 Debits equal credits. Expe nses decrease reta ined earnings (part of stockholders'equity). Stockholders' equity and assets decrease by the same amount.e. Cash (+A) .......................................................................... 390,000Unearned pass reve nue (+L) .................................................... 390,000 Debits equal credits. Since the seas on passes are sold before Vail Resorts provides service, reve nue is deferred un til it is earn ed. Assets and liabilities in crease by the same amount.f. Two tran sacti ons occur:(1) Acco unts receivable (+A) (800)Ski shop sales reve nue (+R, +SE) (800)Debits equal credits. Reve nue in creases reta ined earnings (a part of stockholders' equity). Stockholders' equity and assets in crease by the same amount.⑵ Cost of goods sold (+E, SE) (500)Mercha ndise inven tory ( A) (500)Debits equal credits. Expe nses decrease reta ined earnings (a part of stockholders' equity). Stockholders' equity and assets decrease by the same amount.E3 - 8. (continued)g. Cash (+A) ........................................................................... 320,000Lift reve nue (+R, +SE) ........................................................... 320,000 Debits equal credits. Reve nue in creases reta ined earnings (a part of stockholders'equity). Stockholders' equity and assets in crease by the same amount.h. Cash (+A) ............................................................................. 3,500Unearned rent reve nue (+L) .................................................... 3,500 Debits equal credits. Since the rent is received before the townhouse is used,revenue is deferred until it is earned. Assets and liabilities in crease by the sameamount.i. Acco unts payable ( L) ....................................................... 17,500Cash ( A) ................................................................................... 17,500 Debits equal credits. Assets and liabilities decrease by the same amount.j. Cash (+A) (400)Acco unts receivable ( A) (400)Debits equal credits. Assets in crease and decrease by the same amount.k. Wages expe nse (+E, SE) ................................................ 245,000Cash ( A) .................................................................................... 245,000 Debits equal credits. Expe nses decrease reta ined earnings (a part of stockholders' equity). Stockholders' equity and assets decrease by the same amount.Req. 22/1 Rent expe nse (+E, SE) (275)Cash ( A) (275)2/2 Fuel expe nse (+E, SE) (490)Acco unts payable (+L) (490)2/4 Cash (+A) (820)Unearned reve nue (+L) (820)2/7 Cash (+A) (910)Tran sport reve nue (+R, +SE) (910)2/10 Advertising expense (+E, SE) (175)Cash ( A) (175)2/14 Wages payable ( L) ........................................................................ 2,300Cash ( A) ........................................................................................ 2,3002/18 Cash (+A) .......................................................................................... 1,600 Acco unts receivable (+A) ................................................................... 2,200Tran sport revenue (+R, +SE) ..................................................................... 3,8002/25 Parts supplies (+A) ............................................................................ 2,550Acco unts payable (+L) ............................................................................... 2,5502/27 Retained earnings ( SE) (200)Divide nds payable (+L) (200)Req. 1 and 2Rebuild ing Fees Revenue Re ntRevenueWages Expe Utilities ExpeItem (f) is not a tran sact ion; there has bee n no excha nge.E3 - 10. (con ti nued) Req. 3Net in come using the accrual basis of acco un ti ng:Revenues $19,850 ($19,000 + $850)-Expenses16,900 ($16,500 + $400) Net In come $ 2,950(accrual basis)Assets=Liabilities+Stockholders 'Equity $12,090 $ 7,700$ 1,700 24,800 4,4407,820 2,460 48,5009,360 10,4202,950 netin come7,400 25,300$82,470 $60,640$21,830Req. 4Net in come using the cash basis of acco unting:Cash receipts $27,650 - Cash disburseme nts 19,760Net In come $ 7,890(cash basis)Cash basis net in come ($7,890) is higher tha n accrual basis net in come ($2,950) because ofthe differe nces in the timi ng of recordi ng reve nues versus receipts and expe nses versusdisburseme nts betwee n the two methods. The $7,800 higher amount in cash receipts over reve nues in cludes cash received prior to being earned (from (b), $600) and cash received after being earned (in (d), $7,200).The $2,860 higher amount in cash disburseme nts over expe nses in cludes cash paid after being in curred in the prior period (in (g), $2,300), plus cash paid for supplies to be used and expe nsed in the future (in (k), $960), less an expe nse in curred in January to be paid in February (in (e), $400).(tra nsactions (tra nsactio a through d) g, i, and k )E3 - 11.STACEY S PIANO REBUILDING COMPANYIn come Stateme nt (un adjusted)For the Mon th En ded Jan uary 31,2014Operati ng Reve nu es:Rebuild ing fees reve nue Total operati ng reve nuesOperati ng Expe nses:Wages expe nseUtilities expe nseTotal operati ng expe nses Operat ing In comeOther Item:Rent reve nueNet In come $ 19,000~~19,00016,50040016,9002,100850 $ 2,950Cateri ng Sales Food Sales Reve nue RevenueWages Expe nseBeg.(i)6,280 _______6,280Fuel ExpenseBeg.(h)363363E3 - 14.Req. 1 TRAVELING GOURMET, INC.In come Stateme nt (un adjusted)For the Month Ended March 31,2014Reve nu es:Food sales reve nue $ 11,900Cateri ng sales reve nue 4,200Total reve nues 16,100 Expe nses:Supplies expe nse 10,830Utilities expe nse 420Wages expe nse 6,280Fuel e xpense363Total costs and expe nses17,893 Net Loss $ (1,793)Req. 2O, I, or F ActivityTran sact ion (or No Effect) on Direction and AmountStateme nt of Cash of EffectFlowsReq. 3The compa ny gen erated a small loss of 1,793 duri ng its first monthoperations, before making any adjusting entries. The adjusting entriesuse of the buildi ng and equipme nt and in terest expe nse on the borrow ing will in crease the loss. Cash flows from operat ing activities were also n egative atof for$2,973 (= + 11,900 + 2,600 - 10,830 - 363 - 6,280) . So far the company does not appear to be successful, but it is only in its first month of operating a retail store. If sales can be increased without inflating fixedcosts (particularly salaries expense), the company may soon turn a profit. Itis not unusual for small businesses to report a loss or have negative cash flows from operations as they start up operations.E3 - 15.Brief Expla nati onIssued 10,000 shares of com mon stock to shareholders for $82,000 cash. Purchased store fixtures for $15,400 cash.Purchased $24,800 of in ve ntory, payi ng $6,200 cash and the bala nee on acco unt.Sold $14,000 of goods or services to customers, recei ving $9,820 cash and the bala nee on acco unt. The cost of the goods sold was $7,000. Used $1,480 of utilities duri ng the mon th, not yet paid.Paid $1,300 in wages to employees.Paid $2,480 in cash for rent, $620 related to the curre nt month and $1,860 related to future mon ths.Received $3,960 cash from customers, $1,450 related to curre nt sales and $2,510 related to goods or services to be provided in the future.Kate ' s Kite CompanyIn come Stateme ntFor the Month Ended April 30, 2014Sales Reve nue Expe nses:Cost of sales Wages expe nse Rent expe nse Utilities expe nseTotal expe nsesNet In comeReq. 1 Tran sact ionab cde f ghReq. 2$ 15,450 7,000 1,300 620 1,480 10,400 $ 5,050E3 - 15. (con ti nued)Kate ' s Kite CompanyBala nee SheetAt April 30, 2014Assets Liabilities and Shareholders 'EquityCurre nt Assets: Curre nt Liabilities:Cash $70,400 Acco unts payable $20,080 Acco unts receivable 4,180 Unearned reve nue 2,510 Inven tory 17,800 Total curre nt 22,590liabilitiesPrepaid expe nses 1,860 Shareholders ' Equity :Total curre nt assets 94,240 Common stock 10,000 Store fixtures 15,400 Additi onal paid-i n capital 72,000Reta ined earnings 5,050Total shareholders '87,050equityTotal Liabilities &Total Assets $109,640 Shareholders ' Equity $109,640E3 - 16.Req. 1Assets = Liabilities +Stockholders ' Equity $ 3,200 $ 2,400 $ 8008,000 5,600 4,0006,400 1,600 3,200$17,600 $9,600 $ 8,000Wages Expe nseTravel Expe nseUtilities Expe nseE3 - 16. (con ti nued) Req. 2CashBeg. 3,200 (a) 48,000(b) 5.600 (c) 400 (e) 1.60057,200(d)480 (g) 1,120Acco unts Payable(d) 1,600 2,400 Beg.800 f)1,600Beg. 6,400Lon g-Term Inv estme nts 6,400Lon g-Term Notes Payable1,600 Beg.Common Stock800 Beg.800Additio nai Paid-in Cap itai4,000 Beg. 1,600Reta ined Earnings(g) | 3,200 Beg. 4802,720Con suit ing 4,000Rent Expe$58,400 ($58,000 from sales + $400 on in vestme nts) 56,400 ($36,000 + $12,000 + $800 + $7,600) $ 2,000 Assets =Liabilities +Stockholders ' Equity$ 1,120 $ 1,600$ 80012,400 7,2004,000 6,400 1,6002,7202,000 net in come $19,920$10,400$ 9,520Req. 4* The $400 of inv estme nt in come is not an operat ing reve nue and is not in cluded in thecomputatio n.The in creas ing trend in the net profit margin ratio (from % in 2013 to % in 2014 and the n to % in 2015) suggests that the compa ny is man agi ng its sales and expe nses more effectively over time. E3 - 16. (con ti nued) Req. 3Revenues -Expenses Net In come Net Profit Margin RatioNet In come Sales (Operat ing) Reve nues =$2,000$58,000*or %E3 - 17. Req. 1Acco unts receivable in creases with customer sales on acco unt and decreases with cash payme nts received from customers.Prepaid expe nses in crease with cash payme nts of expe nses related to future periods and decrease as these expe nses are in curred over time.Unearned subscripti ons in crease with cash payme nts received from customers for goods or services to be provided in the future and decreases whe n those goods or services are provided. Req. 2Computati ons:Beg inning+ Trade acco unts 717+ receivablePrepaid 95+expensesUnearned 224 +subscripti ons“. ____________________________________________________________________________________________________________ I™-I ■+_= Ending 5,240 ? = 693 ? = 5,264 203 ? =107 ? = 191 2,690? = 231 ?=2,683Trade Acco untsReceivable1/1 7175,240 12/31 6935,264Prepaid ExpensesUnearned Subscriptio nsE3 - 18.ITEM LOCATION1. Description of a company ' sprimary business(es).2. Income taxes paid.3. Accounts receivable.4. Cash flow from operatingactivities.5. Description of a company 'srevenue recognition policy.6. The inventory sold during theyear.7. The data needed to compute thenet profit margin ratio.Letter to shareholders; Managemen't s Discussion and Analysis Summary of significant accounting policies noteNotes; Statement of cash flowsBalance sheetStatement of cash flowsSummary of significant accounting policies noteIncome statement (Cost of Goods Sold) Income statementPROBLEMSP3-1.Tran sact ions Debit Credita.5 1,8Example: Purchased equipme nt for use in the bus in ess; paid one-third cash and sig ned a note payable for the bala nee.b.Paid cash for salaries and wages earned by employees this period. 15 1c. Paid cash on acco unts payable for expe nses in curred last period.7 1d. Purchased supplies to be used later; paid cash. 3 1e. Performed services this period on credit. 2 14f. Collected cash on acco unts receivable for services performed lastperiod. 1 2g. Issued stock to new inv estors. 1 11,12h. Paid operati ng expe nses in curred this period. 15 1i.In curred operati ng expe nses this period to be paid n ext period. 15 7 j. Purchased a pate nt (an intan gible asset); paid cash. 6 1 k. Collected cash for services performed this period. 1 14 l. Used some of the supplies on hand for operati ons. 15 3 m.16 1, 10Paid three-fourths of the in come tax expe nse for the year;the bala nee will be paid n ext year.n. Made a payme nt on the equipme nt note in ( a); the payme ntwas part prin cipal and part in terest expe nse. 8, 17 1o. On the last day of the curre nt period, paid cash for an in sura neepolicy coveri ng the n ext two years. 4 1a. Cash (+A) ......................................................................................... 40,000Common stock (+SE) (20)Additio nal paid-in capital (+SE) ................................................................. 39,980b. Cash (+A) ......................................................................................... 60,000Note payable (Ion g-term) (+L) .................................................................... 60,000c. Rent expe nse (+E, SE) ...................................................................... 1,500Prepaid rent (+A) ................................................................................ 1,500 Cash ( A) ..................................................................................................... 3,000d. Prepaid in sura nee (+A) .................................................................... 2,400Cash ( A) .................................................................................................... 2,400e. Furn iture and fixtures (or Equipme nt) .................................................. (+A) 15,000Acco unts payable (+L) ............................................................................... 12,000Cash ( A) .................................................................................................... 3,000f. Inven tory (+A) ................................... 2,800Cash ( A) .................................................................................................... 2,800g. Advertis ing expe nse (+E, SE) (350)Cash ( A) (350)h. Cash (+A) (850)Acco unts receivable (+A) (850)Sales reve nue (+R, +SE) ............................................................................. 1,700Cost of goods sold (+E, SE) (900)Inven tory ( A) (900)i. Acco unts payable ( L) ...................................................................... 12,000Cash ( A) .................................................................................................... 12,000j. Cash (+A) (210)Acco unts receivable ( A) (210)。

会计学原理financialaccountingbyrobertlibby第八版第三章答案