Menu
- Intermediate Accounting 9th Edition Solution Manual Anton
- Intermediate Accounting 9th Edition Solution
- Intermediate Accounting 9th Edition Solution Manual Free
Dec 12, 2017 This is completed downloadable Solution Manual for Intermediate Accounting 14th Edition by Donald E. Kieso, Jerry J. Weygandt and Terry D. Warfield Instant Download Intermediate Accounting 14th Edition by Donald E. Kieso, Jerry J. Weygandt and Terry D. Warfield Solution Manual. Instant download Solution Manual For Intermediate Accounting 9th Edition David Spiceland Item details: Type: Solutions Manual Format: Digital copy DOC DOCX PDF RTF in 'ZIP file' Download Time: Immediately after payment is completed. Note: This is not Textbook Click here to. Intermediate Accounting 15th Edition Solution' / Intermediate Accounting 15th Edition Solution'. Solutios Manual for Intermediate Accounting 10th Edition by David Spiceland Instant Download Solutios Manual for Intermediate Accounting 10th Edition by David Spiceland Item: Solutions Manual Format: Digital copy DOC, DOCX, PDF, RTF in “ZIP file” Download Time: Immediately after payment is completed. Note: This is not Textbook or Ebooks David Spiceland,James Sepe,Mark W. Nelson,Wayne M.
Description
CHAPTER 2
SOLUTIONS TO B EXERCISES
EXERCISE 2-1B (15–20 minutes)
(a) True.
(b) False – General-purpose financial reports helps users who lack the ability to demand all the financial information they need from an entity and therefore must rely, at least partly, on the information in financial reports.
(c) False – Standard-setting that is based on personal conceptual frameworks will lead to different conclusions about identical or similar issues. As a result, standards will not be consistent with one another, and past decisions may not be indicative of future ones.
(d) False – Information that is decision-useful to capital providers may also be useful to other users of financial reporting, who are not capital providers.
(e) False – An implicit assumption is that users need reasonable knowledge of business and financial accounting matters to understand the information contained in the financial statements.
(f) True.
EXERCISE 2-2B (15–20 minutes)
(a) False – The fundamental qualitative characteristics that make accounting information useful are relevance and faithful representation.
(b) False – Relevant information must also be material.
(c) False – prudence or conservatism generally is in conflict with the quality of neutrality and may lead to bias in financial reporting.
(d) False – Information that is relevant is characterized as having predictive or confirmatory value.
(e) False – Comparability also refers to comparisons of a firm over time (consistency).
(f) False – Enhancing characteristics relate to both relevance and faithful representation.
(g) True.
E2-3B (20–30 minutes)
(a) | Relevance. | (f) | Cost constraint. |
(b) | Consistency. | (g) | Neutrality. |
(c) | Feedback value. | (h) | Timeliness. |
(d) | Relevance and faithful representation. | (i) | Verifiability. |
(e) | Neutrality. | (j) | Comparability. |
E2-4B (15–20 minutes)
(a) | Faithful representation. | (f) | Confirmatory value. |
(b) | Neutrality. | (g) | Verifiability. |
(c) | Comparability. | (h) | Comparability, verifiability, timeliness, and understandability. |
(d) | Relevance. | (i) | Timeliness. |
(e) | Comparability. | (j) | Relevance and faithful representation. |
E2-5B (15–20 minutes)
(a) Revenues, expenses.
(b) Distribution to owners
(Note: Net effect is to reduce equity and assets).
(c) Gains, losses.
(d) Assets.
(e) Investment by owners, comprehensive income
(or, revenues and gains).
(f) Liabilities.
(g) Comprehensive income
(also possible would be revenues and gains).
(h) Comprehensive income.
(i) Revenues.
(j) Equity.
(k) Comprehensive income.
(l) Equity.
E2-6B (15–20 minutes)
(a) | 5. | Measurement principle (fair value). |
(b) | 2. | Going concern assumption. |
(c) | 7. | Expense recognition principle. |
(d) | 1. | Economic entity assumption. |
(e) | 8. | Full disclosure principle. |
(f) | 5. | Measurement principle (historical cost ). |
(g) | 4. | Periodicity assumption. |
(h) | 3. | Monetary unit assumption. |
E2-7B (20–25 minutes)
(a) | Full disclosure principle. | |
(b) | Expense recognition principle. | |
(c) | Measurement principle (historical cost ). | |
(d) | Measurement principle (fair value). | |
(e) | Full disclosure principle. | |
(f) | Measurement principle (fair value). | |
(g) | Materiality. | |
(h) | Economic entity assumption. | |
(i) | Full disclosure principle. | |
(j) | Revenue recognition principle. | |
(k) | Expense recognition principle. | |
(l) | Expense recognition principle. | |
(m) | Periodicity assumption. | |
(n) | Measurement principle (historical cost ). | |
(o) | Economic entity assumption. | |
(p) | Materiality. | |
(q) | Expense recognition principle. |
E2-8B (20 minutes)
(a) This event need not be disclosed in the financial statements. The amount of monies involved is relatively small in relation to the net income of the business and should not affect the fairness of the presentation of the financial statements.
(b) According to GAAP, the basis upon which inventory amounts are stated (lower of cost or market) and the method used in determining cost (LIFO, FIFO, average cost, etc.) should also be reported. The disclosure requirement related to the method used in determining cost should be emphasized, indicating that where possible alternatives exist in financial reporting, disclosure in some format is required.
(c) Comparability requires that disclosure of changes in accounting principles be made in the financial statements. To do otherwise would result in financial statements that are misleading. Financial statements are more useful if they can be compared with similar reports for prior years.
(d) The proper accounting for this situation is to report the equipment as an asset and the notes payable as a liability on the balance sheet. Offsetting is permitted in only limited situations where certain assets are contractually committed to pay off liabilities.
(e) It is well established in accounting that revenues and cost of goods sold must be disclosed in the reporting of an income statement. It might be noted to students that such was not always the case. At one time, only net income was reported but over time we have evolved to the present reporting format.
E2-9B (15–20 minutes)
(a) Probably the company is too conservative in its accounting for this transaction. The expense recognition principle indicates that expenses should be allocated to the appropriate periods involved. In this case, there appears to be a high uncertainty that the company will have to pay. FASB ASC 450-20-25 requires that a loss should be accrued only (1) when it is probable that the company would lose the suit and (2) the amount of the loss can be reasonably estimated. (Note to instructor: The student will probably be unfamiliar with FASB ASC 450-20-25. The purpose of this question is to develop some decision framework when the probability of a future event must be assumed.)
(b) At the present time, accountants do not recognize price-level adjustments in the accounts. Hence, it is misleading to deviate from the measurement principle (historical cost) because conjecture or opinion can take place. It should also be noted that depreciation is not so much a matter of valuation as it is a means of cost allocation. Assets are not depreciated on the basis of a decline in their fair market value, but are depreciated on the basis of systematic charges of expired costs against revenues. (Note to instructor: It might be called to the students’ attention that the FASB does encourage supplemental disclosure of price-level information.)
(c) Most accounting methods are based on the assumption that the business enterprise will have a long life. Acceptance of this assumption provides credibility to the historical cost principle, which would be of limited usefulness if liquidation were assumed. Only if we assume some permanence to the enterprise, is the use of depreciation and amortization policies justifiable and appropriate. Therefore, it is incorrect to assume liquidation as Barela, Inc. has done in this situation. It should be noted that only where liquidation appears imminent is the going concern assumption inapplicable.
(d) The measurement principle (historical cost) indicates that assets and liabilities are accounted for on the basis of cost. If we were to select sales value, for example, we would have an extremely difficult time in attempting to establish a sales value for a given item without selling it. It should further be noted that the revenue recognition principle provides the answer to when revenue should be recognized. Revenue should be recognized when the company satisfies a performance obligation.
E2-9B (Continued)
(e) This entry violates the economic entity assumption. This assumption in accounting indicates that economic activity can be identified with
a particular unit of accountability. In this situation, the company erred by charging this cost to the wrong economic entity.
a particular unit of accountability. In this situation, the company erred by charging this cost to the wrong economic entity.
(f) The answer to this question is the same as (d).
E2-10B (15–20 minutes)
(a) Assets should be recorded at the fair market value of what is given up or the fair market value of what is received, whichever is more clearly evident. It should be emphasized that it is not a violation of the historical cost principle to use the fair market value of the stock. Recording the asset at the par value of the stock has no conceptual validity. Par value is merely an arbitrary amount usually set at the date of incorporation.
(b) The gain should be recognized at the point of sale. Deferral of the gain should not be permitted, as the company has satisfied its performance obligation. To explore this question at greater length, one might ask what justification other than the controller’s might be used to justify the deferral of the gain. For example, the rationale provided in GAAP, non-completion of the earnings process, might be discussed.
(c) It appears from the information that the sale should be recorded in 2015 instead of 2014. Regardless of whether the terms are f.o.b. shipping point or f.o.b. destination, the point is that the inventory was sold in 2015. It should be noted that if the company is employing a perpetual inventory system in dollars and quantities, a debit to Cost of Goods Sold and
a credit to Inventory is also necessary in 2015.
a credit to Inventory is also necessary in 2015.
(d) A gain should not be recognized until the inventory is sold. Accountants follow the measurement principle (historical cost) and write-ups of assets are not permitted. It should also be noted that the revenue recognition principle states that revenue should not be recognized until the performance obligation is satisfied.
(e) Depreciation is an allocation of cost, not an attempt to value assets. As a consequence, even if the value of the building is increasing, costs related to this building should be matched with revenues on the income statement, not as a charge against retained earnings.
CHAPTER 3
SOLUTIONS TO B PROBLEMS
SOLUTIONS TO B PROBLEMS
PROBLEM 3-1B
(a) (Explanations are omitted.) and (d)
(a) (Explanations are omitted.) and (d)
Cash Equipment
Mar. 1 50,000 Mar. 3 1,500 Mar. 2 22,800
10 850 4 1,165
26 2.600 21 7,600
23 3,000 Owner’s Capital
31 2,500 Mar. 23 3,000 Mar. 1 50,000
31 910 31 13,315
Bal. 31 60,315
Bal. 31 36,775
Mar. 1 50,000 Mar. 3 1,500 Mar. 2 22,800
10 850 4 1,165
26 2.600 21 7,600
23 3,000 Owner’s Capital
31 2,500 Mar. 23 3,000 Mar. 1 50,000
31 910 31 13,315
Bal. 31 60,315
Bal. 31 36,775
Accounts Receivable
Mar. 15 11,560 Mar. 26 2,600
30 6,890 Accounts Payable
Bal. 30 15,850 Mar. 21 7,600 Mar. 1 22,800
Bal. 31 15,200
Rent Expense
Mar. 3 1,500 Mar. 31 1,500
Mar. 15 11,560 Mar. 26 2,600
30 6,890 Accounts Payable
Bal. 30 15,850 Mar. 21 7,600 Mar. 1 22,800
Bal. 31 15,200
Rent Expense
Mar. 3 1,500 Mar. 31 1,500
Supplies Service Revenue
Mar. 1 1,165 Mar. 31 695 Mar. 31 19,300 Mar. 10 850
Bal. 31 470 15 11,560
31 6,890
19,300 19,300
Mar. 1 1,165 Mar. 31 695 Mar. 31 19,300 Mar. 10 850
Bal. 31 470 15 11,560
31 6,890
19,300 19,300
Office Expense Accumulated Depreciation-Equipment
Mar. 31 910 Mar. 31 910 Mar. 31 380
Mar. 31 910 Mar. 31 910 Mar. 31 380
Salaries and Wages Expense Supplies Expense
Mar. 31 2,500 Mar. 31 2,500 Mar. 31 695 Mar. 31 695
PROBLEM 3-1B (Continued)
Mar. 31 2,500 Mar. 31 2,500 Mar. 31 695 Mar. 31 695
PROBLEM 3-1B (Continued)
Depreciation Expense Income Summary
Mar. 31 380 Mar. 31 380 Mar. 31 1,500 Mar. 31 19,300
31 910
31 2,500
31 695
31 380
31 Inc. 13,315
19,300 19,300
(b) ROCK MEDICAL
Trial Balance
March 31
Debit Credit
Cash $36,775
Accounts Receivable 15,850
Supplies 470
Equipment 22,800
Accumulated Depreciation-Equipment $ 380
Accounts Payable 15,200
Owner’s Capital 47,000
Service Revenue 19,300
Rent Expense 1,500
Office Expense 910
Salaries and Wages Expense 2,500
Supplies Expense 695
Depreciation Expense 380
Totals $81,880 $81,800
PROBLEM 3-1B (Continued)
(c) ROCK MEDICAL
Income Statement
For the Month of March
Service revenue $19,300
Expenses:
Salaries and wages expense $2,500
Rent expense 1,500
Office expense 910
Supplies expense 695
Depreciation expense 380
Total expenses 5,985
Net income $13,315
ROCK MEDICAL
Statement of Owners’ Equity
For the Month of March
Owner’s Capital March 1 $50,000
Add: Net income for March 13,315
63,315
Less: Withdrawal by owner 3,000
Owner’s Capital March 31 $60,315
Mar. 31 380 Mar. 31 380 Mar. 31 1,500 Mar. 31 19,300
31 910
31 2,500
31 695
31 380
31 Inc. 13,315
19,300 19,300
(b) ROCK MEDICAL
Trial Balance
March 31
Debit Credit
Cash $36,775
Accounts Receivable 15,850
Supplies 470
Equipment 22,800
Accumulated Depreciation-Equipment $ 380
Accounts Payable 15,200
Owner’s Capital 47,000
Service Revenue 19,300
Rent Expense 1,500
Office Expense 910
Salaries and Wages Expense 2,500
Supplies Expense 695
Depreciation Expense 380
Totals $81,880 $81,800
PROBLEM 3-1B (Continued)
(c) ROCK MEDICAL
Income Statement
For the Month of March
Service revenue $19,300
Expenses:
Salaries and wages expense $2,500
Rent expense 1,500
Office expense 910
Supplies expense 695
Depreciation expense 380
Total expenses 5,985
Net income $13,315
ROCK MEDICAL
Statement of Owners’ Equity
For the Month of March
Owner’s Capital March 1 $50,000
Add: Net income for March 13,315
63,315
Less: Withdrawal by owner 3,000
Owner’s Capital March 31 $60,315
ROCK MEDICAL
Balance Sheet
As of March 31
Assets Liabilities and Owners’ Equity
Cash $36,775 Accounts payable $15,200
Accounts receivable 15,850 Owner’s Capital 60,315
Supplies 470
Equipment. 22,800
Accum. depreciation-
equipment
(380)
Total liabilities and
Balance Sheet
As of March 31
Assets Liabilities and Owners’ Equity
Cash $36,775 Accounts payable $15,200
Accounts receivable 15,850 Owner’s Capital 60,315
Supplies 470
Equipment. 22,800
Accum. depreciation-
equipment
(380)
Total liabilities and
Total assets $75,515 owners’ equity $75,515
PROBLEM 3-1B (Continued)
PROBLEM 3-1B (Continued)
(d) ROCK MEDICAL
Post-Closing Trial Balance
March 31
Debit Credit
Cash $36,775
Accounts Receivable 15,850
Supplies 470
Equipment 22,800
Accumulated Depreciation-Equipment $ 380
Accounts Payable 15,200
Owner’s Capital 60,315
Totals $75,895 $75,895
Post-Closing Trial Balance
March 31
Debit Credit
Cash $36,775
Accounts Receivable 15,850
Supplies 470
Equipment 22,800
Accumulated Depreciation-Equipment $ 380
Accounts Payable 15,200
Owner’s Capital 60,315
Totals $75,895 $75,895
?
PROBLEM 3-2B
(a) Dec. 31 Accounts Receivable 750
Service Revenue 750
PROBLEM 3-2B
(a) Dec. 31 Accounts Receivable 750
Service Revenue 750
31 Unearned Service Revenue 850
Service Revenue 850
Service Revenue 850
31 Supplies Expense 2,800
Supplies 2,800
Supplies 2,800
31 Depreciation Expense 3,000
Accumulated Depreciation-
Equipment
3,000
Accumulated Depreciation-
Equipment
3,000
31 Interest Expense 600
Interest Payable 600
Interest Payable 600
31 Insurance Expense 1,200
Prepaid Insurance 1,200
Prepaid Insurance 1,200
31 Salaries and Wages Expense 1,850
Salaries and Wages Payable 1,850
Salaries and Wages Payable 1,850
(b) PALM TRAVEL AGENCY
Income Statement
For the Year Ended December 31, 2014
Revenues
Service revenue $47,700
Expenses
Salaries and wages expense $27,850
Depreciation expense 3,000
Supplies expense 2,800
Rent expense 2,000
Insurance expense 1,200
Interest expense 600
Total expenses 37,450
Net income $10,250
PROBLEM 3-2B (Continued)
Income Statement
For the Year Ended December 31, 2014
Revenues
Service revenue $47,700
Expenses
Salaries and wages expense $27,850
Depreciation expense 3,000
Supplies expense 2,800
Rent expense 2,000
Insurance expense 1,200
Interest expense 600
Total expenses 37,450
Net income $10,250
PROBLEM 3-2B (Continued)
PALM TRAVEL AGENCY
Statement of Retained Earnings
For the Year Ended December 31, 2014
Retained earnings, January 1 $ 13,800
Add: Net income 10,250
Retained earnings, December 31 $24,050
Statement of Retained Earnings
For the Year Ended December 31, 2014
Retained earnings, January 1 $ 13,800
Add: Net income 10,250
Retained earnings, December 31 $24,050
PALM TRAVEL AGENCY
Balance Sheet
December 31, 2014
Assets
Cash $16,500
Accounts receivable 7,250
Supplies 800
Prepaid insurance 800
Equipment $30,000
Less: Accumulated depreciation-equipment 15,000 15,000
Total assets $40,350
Balance Sheet
December 31, 2014
Assets
Cash $16,500
Accounts receivable 7,250
Supplies 800
Prepaid insurance 800
Equipment $30,000
Less: Accumulated depreciation-equipment 15,000 15,000
Total assets $40,350
Liabilities and Stockholders’ Equity
Liabilities
Notes payable $ 10,000
Accounts payable 2,600
Salaries and wages payable 1,850
Unearned service revenue 250
Interest payable 600
Total liabilities 15,300
Stockholders’ equity
Common stock $1,000
Retained earnings 24,050 25,050
Total liabilities and stockholders’
equity
$40,350
Liabilities
Notes payable $ 10,000
Accounts payable 2,600
Salaries and wages payable 1,850
Unearned service revenue 250
Interest payable 600
Total liabilities 15,300
Stockholders’ equity
Common stock $1,000
Retained earnings 24,050 25,050
Total liabilities and stockholders’
equity
$40,350
(c) 1. Interest is $100 per month or 0.67% of the note payable. 0.67% X 12 = 8% interest per year.
2. Salaries and Wages Expense, $27,850 less Salaries and Wages Payable 12/31/14, $1,850 = $26,000. Total Payments, $27,200 – $26,000 = $1.200 Salaries and Wages Payable 12/31/13.
?
2. Salaries and Wages Expense, $27,850 less Salaries and Wages Payable 12/31/14, $1,850 = $26,000. Total Payments, $27,200 – $26,000 = $1.200 Salaries and Wages Payable 12/31/13.
?
PROBLEM 3-3B
1. Dec. 31 Salaries and Wages Expense 3,750
Salaries and Wages Payable 3,750
(5 X $850 X 3/5) = $2,550
(4 X $500 X 3/5) = 1,200
Total accrued salaries $3,750
1. Dec. 31 Salaries and Wages Expense 3,750
Salaries and Wages Payable 3,750
(5 X $850 X 3/5) = $2,550
(4 X $500 X 3/5) = 1,200
Total accrued salaries $3,750
2. 31 Unearned Rent Revenue 102,000
Rent Revenue 102,000
(2 X $8,000 X 3) = $48,000
(1 X $10,000 X 2) = 20,000
(4 X $8,500 X 1) = 34,000
Total rent earned $102,000
Rent Revenue 102,000
(2 X $8,000 X 3) = $48,000
(1 X $10,000 X 2) = 20,000
(4 X $8,500 X 1) = 34,000
Total rent earned $102,000
3. 31 Advertising Expense 6,600
Prepaid Advertising 6,600
(JSK – $500 per month
for 6 months) = $3,000
(K56 – $700 per month
for 3 months) = 2,100
(L76H – $1,500 per month
for 1 months) = 1,500
Total advertising expense $6,600
Prepaid Advertising 6,600
(JSK – $500 per month
for 6 months) = $3,000
(K56 – $700 per month
for 3 months) = 2,100
(L76H – $1,500 per month
for 1 months) = 1,500
Total advertising expense $6,600
4. 31 Interest Expense 3,600
Interest Payable
($108,000 X 10% X 4/12) 3,600
Interest Payable
($108,000 X 10% X 4/12) 3,600
?
PROBLEM 3-4B
(a) June 30 Supplies Expense 3,400
Supplies 3,400
PROBLEM 3-4B
(a) June 30 Supplies Expense 3,400
Supplies 3,400
30 Depreciation Expense 6,800
Accumulated Depreciation-
Equipment
6,800
Accumulated Depreciation-
Equipment
6,800
30 Interest Expense 3,800
Interest Payable 3,800
Interest Payable 3,800
PROBLEM 3-4B (Continued)
(b) ORANGE CENTER
Adjusted Trial Balance
June 30, 2014
Dr. Cr.
Cash $ 6,800
Accounts Receivable 49,800
Inventory 56,950
Supplies 2,200
Equipment 62,000
Accumulated Depr.- Equipment $ 26,800
Notes Payable 41,000
Accounts Payable 32,500
Common Stock 1,000
Retained Earnings 61,700
Sales 506,800
Sales Returns and Allowances 13,000
Cost of Goods Sold 246,900
Salaries and Wages Expense 125,650
Advertising Expense 36,000
Utilities Expense 6,890
Maintenance and Repairs Expense 9,810
Delivery Expense 16,800
Rent Expense 26,800
Supplies Expense 3,400
Depreciation Expense 6,800
Interest Expense 3,800
Interest Payable 3,800
Totals $ 673,600 $ 673,600
(b) ORANGE CENTER
Adjusted Trial Balance
June 30, 2014
Dr. Cr.
Cash $ 6,800
Accounts Receivable 49,800
Inventory 56,950
Supplies 2,200
Equipment 62,000
Accumulated Depr.- Equipment $ 26,800
Notes Payable 41,000
Accounts Payable 32,500
Common Stock 1,000
Retained Earnings 61,700
Sales 506,800
Sales Returns and Allowances 13,000
Cost of Goods Sold 246,900
Salaries and Wages Expense 125,650
Advertising Expense 36,000
Utilities Expense 6,890
Maintenance and Repairs Expense 9,810
Delivery Expense 16,800
Rent Expense 26,800
Supplies Expense 3,400
Depreciation Expense 6,800
Interest Expense 3,800
Interest Payable 3,800
Totals $ 673,600 $ 673,600
PROBLEM 3-4B (Continued)
(c) ORANGE CENTER
Income Statement
For the Year Ended June 30, 2014
Sales revenue
Sales $506,800
Less: Sales returns and
allowances 13,000
Net sales 493,800
Cost of goods sold 246,900
Gross profit 246.900
Operating expenses
Selling expenses
Salaries and wages expense
($125,650 X 60%) $75,390
Advertising expense 36,000
Rent expense
($26,800 X 80%) 21,440
Freight Out 16,800
Depreciation Expense 6,800
Utilities expense
($6,890 X 80%) 5,512
Supplies expense 3,400
Total selling expenses $165,342
Administrative expenses
Salaries and wages expense
($125,650 X 40%) 50,260
Maintenance and Repairs
Expense
9,810
Rent expense
($26,800 X 20%) 5,360
Utilities expense
($6,890 X 20%) 1,378
Total admin. expenses 66,808
Total oper. expenses 232,150
Income from operations 14,750
Other expenses and losses
Interest expense 3,800
Net income $ 10,950
Income Statement
For the Year Ended June 30, 2014
Sales revenue
Sales $506,800
Less: Sales returns and
allowances 13,000
Net sales 493,800
Cost of goods sold 246,900
Gross profit 246.900
Operating expenses
Selling expenses
Salaries and wages expense
($125,650 X 60%) $75,390
Advertising expense 36,000
Rent expense
($26,800 X 80%) 21,440
Freight Out 16,800
Depreciation Expense 6,800
Utilities expense
($6,890 X 80%) 5,512
Supplies expense 3,400
Total selling expenses $165,342
Administrative expenses
Salaries and wages expense
($125,650 X 40%) 50,260
Maintenance and Repairs
Expense
9,810
Rent expense
($26,800 X 20%) 5,360
Utilities expense
($6,890 X 20%) 1,378
Total admin. expenses 66,808
Total oper. expenses 232,150
Income from operations 14,750
Other expenses and losses
Interest expense 3,800
Net income $ 10,950
![Intermediate accounting 9th edition solutions manual Intermediate accounting 9th edition solutions manual](https://image.slidesharecdn.com/intermediateaccounting9theditionspicelandsolutionsmanual-171230145722/95/intermediate-accounting-9th-edition-spiceland-solutions-manual-23-638.jpg?cb=1514645865)
PROBLEM 3-4B (Continued)
ORANGE CENTER
Retained Earnings Statement
For the Year Ended June 30, 2014
Retained earnings, July 1, 2013 $ 61,700
Less: Net income 10,950
Retained earnings, June 30, 2014 $ 72,650
Retained Earnings Statement
For the Year Ended June 30, 2014
Retained earnings, July 1, 2013 $ 61,700
Less: Net income 10,950
Retained earnings, June 30, 2014 $ 72,650
ORANGE CENTER
Balance Sheet
June 30, 2014
Assets
Current assets
Cash $ 6,800
Accounts receivable 49,800
Inventory 56,950
Supplies 2,200
Total current assets $115,750
Property, plant, and equipment
Equipment 62,000
Accumulated depreciation-
equipment
26,800
35,200
Total assets $150,950
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable due next year $10,000
Accounts payable 32,500
Interest payable 3,800
Total current liabilities $ 46,300
Long-term liabilities
Notes payable 31,000
Total liabilities 77,300
Stockholders’ equity
Common stock 1,000
Retained earnings 72,650 73,650
Total liabilities and stockholders’
equity
$150,950
Balance Sheet
June 30, 2014
Assets
Current assets
Cash $ 6,800
Accounts receivable 49,800
Inventory 56,950
Supplies 2,200
Total current assets $115,750
Property, plant, and equipment
Equipment 62,000
Accumulated depreciation-
equipment
26,800
35,200
Total assets $150,950
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable due next year $10,000
Accounts payable 32,500
Interest payable 3,800
Total current liabilities $ 46,300
Long-term liabilities
Notes payable 31,000
Total liabilities 77,300
Stockholders’ equity
Common stock 1,000
Retained earnings 72,650 73,650
Total liabilities and stockholders’
equity
$150,950
PROBLEM 3-4B (Continued)
(d) June 30 Sales Revenue 506,800
Income Summary 506,800
Income Summary 506,800
30 Income Summary 495,850
Sales Returns and Allowances 13,000
Cost of Goods Sold 246,900
Salaries and Wages Expense 125,650
Advertising Expense 36,000
Utilities Expense 6,890
Maintenance and Repair Expense 9,810
Freight Out 16,800
Rent Expense 26,800
Supplies Expense 3,400
Depreciation Expense 6,800
Interest Expense 3,800
Sales Returns and Allowances 13,000
Cost of Goods Sold 246,900
Salaries and Wages Expense 125,650
Advertising Expense 36,000
Utilities Expense 6,890
Maintenance and Repair Expense 9,810
Freight Out 16,800
Rent Expense 26,800
Supplies Expense 3,400
Depreciation Expense 6,800
Interest Expense 3,800
30 Income Summary 10,950
Retained Earnings 10,950
Retained Earnings 10,950
(e) ORANGE CENTER
Post-Closing Trial Balance
June 30, 2014
Debit Credit
Cash $ 6,800
Accounts Receivable 49,800
Inventory 56,950
Supplies 2,200
Equipment 62,000
Accumulated Depreciation-Equipment $ 26,800
Notes Payable 41,000
Accounts Payable 32,500
Interest Payable 3,800
Common Stock 1,000
Retained Earnings 72,650
$177,750 $177,750
Post-Closing Trial Balance
June 30, 2014
Debit Credit
Cash $ 6,800
Accounts Receivable 49,800
Inventory 56,950
Supplies 2,200
Equipment 62,000
Accumulated Depreciation-Equipment $ 26,800
Notes Payable 41,000
Accounts Payable 32,500
Interest Payable 3,800
Common Stock 1,000
Retained Earnings 72,650
$177,750 $177,750
?
PROBLEM 3-5B
(a) -1-
Depreciation Expense 15,000
Accumulated Depreciation-Equipment
(1/16 X $240,000) 15,000
PROBLEM 3-5B
(a) -1-
Depreciation Expense 15,000
Accumulated Depreciation-Equipment
(1/16 X $240,000) 15,000
-2-
Interest Expense 7,200
Interest Payable
($160,000 X 12% X 135/360) * 7,200
Interest Expense 7,200
Interest Payable
($160,000 X 12% X 135/360) * 7,200
Intermediate Accounting 9th Edition Solution Manual Anton
-3-
Admissions Revenue 125,000
Unearned Admissions Revenue
(5,000 X $25) 125,000
Admissions Revenue 125,000
Unearned Admissions Revenue
(5,000 X $25) 125,000
-4-
Prepaid Advertising 4,500
Advertising Expense 4,500
Prepaid Advertising 4,500
Advertising Expense 4,500
-5-
Salaries and Wages Expense 9,200
Salaries and Wages Payable 9,200
Salaries and Wages Expense 9,200
Salaries and Wages Payable 9,200
(b) 1. Interest expense, $9,200 ($2,000 + $7,200).
2. Admissions revenue, $555,000 ($680,000 – $125,000).
3. Advertising expense, $52,080 ($56,580 – $4,500).
4. Salaries and wages expense, $177,200 ($168,000 + $9,200).
2. Admissions revenue, $555,000 ($680,000 – $125,000).
3. Advertising expense, $52,080 ($56,580 – $4,500).
4. Salaries and wages expense, $177,200 ($168,000 + $9,200).
*Note to instructor: If 30-day months are assumed, interest expense = $7,040 ($160,000 X 12% X 132/360).
?
PROBLEM 3-6B
(a) -1-
Service Revenue 9,000
Unearned Service Revenue 9,000
?
PROBLEM 3-6B
(a) -1-
Service Revenue 9,000
Unearned Service Revenue 9,000
-2-
Accounts Receivable 12,600
Service Revenue 12,600
Accounts Receivable 12,600
Service Revenue 12,600
-3-
Bad Debt Expense 3,650
Allowance for Doubtful Accounts 3,650
Bad Debt Expense 3,650
Allowance for Doubtful Accounts 3,650
-4-
Insurance Expense 2,100
Prepaid Insurance 2,100
Insurance Expense 2,100
Prepaid Insurance 2,100
-5-
Depreciation Expense 4,300
Accumulated Depreciation-Equipment
($43,000 X 0.10) 4,300
Depreciation Expense 4,300
Accumulated Depreciation-Equipment
($43,000 X 0.10) 4,300
-6-
Interest Expense 500
Interest Payable
($60,000 X 0.12 X 30/360) 500
Interest Expense 500
Interest Payable
($60,000 X 0.12 X 30/360) 500
-7-
Prepaid Rent Expense 3,000
Rent Expense 3,000
Prepaid Rent Expense 3,000
Rent Expense 3,000
-8-
Salaries and Wages Expense 2,650
Salaries and Wages Payable 2,650
Salaries and Wages Expense 2,650
Salaries and Wages Payable 2,650
PROBLEM 3-6B (Continued)
(b) GATOR CONSULTING
Income Statement
For the Year Ended December 31, 2014
Service revenue ($427,500 – $9,000 + $12,600) $431,100
Expenses
Salaries and wages expense
($256,800 + $2,650)
$259,450
Rent expense ($42,000 – $3,000) 39,000
Office expense 26,900
Utilities expense 16,800
Depreciation expense 4,300
Bad debt expense 3,650
Insurance expense 2,100
Interest expense 500
Total expenses 352,700
Net income $ 78,400
GATOR CONSULTING
Statement of Owners’ Equity
For the Year Ended December 31, 2014
Onwer’s Capital, January 1 $ 43,250a
Add: Net income 78,400
Less: Withdrawals (25,000)
Owner’s Capital, December 31 $ 96,650
(b) GATOR CONSULTING
Income Statement
For the Year Ended December 31, 2014
Service revenue ($427,500 – $9,000 + $12,600) $431,100
Expenses
Salaries and wages expense
($256,800 + $2,650)
$259,450
Rent expense ($42,000 – $3,000) 39,000
Office expense 26,900
Utilities expense 16,800
Depreciation expense 4,300
Bad debt expense 3,650
Insurance expense 2,100
Interest expense 500
Total expenses 352,700
Net income $ 78,400
GATOR CONSULTING
Statement of Owners’ Equity
For the Year Ended December 31, 2014
Onwer’s Capital, January 1 $ 43,250a
Add: Net income 78,400
Less: Withdrawals (25,000)
Owner’s Capital, December 31 $ 96,650
(a)Owner’s Capital-trial balance $ 18,250
Withdrawals during the year 25,000
Owner’s Capital, as of January 1, 2013 $ 43,250
PROBLEM 3-6B (Continued)
GATOR CONSULTING
Balance Sheet
December 31, 2014
Assets
Current assets
Cash $21,600
Accounts receivable
($85,600 + $12,600)
$98,200
Less: Allowance for
doubtful accounts
(5,250)*
92,950
Supplies 12,600
Prepaid insurance
($2,800 – $2,100)
700
Prepaid rent expense 3,000
Total current assets $ 130,850
Equipment 43,000
Less: Accumulated depreciation (15,050)** 27,950
Total assets $158,800
Liabilities and Owners’ Equity
Current liabilities
Notes payable $50,000
Unearned service revenue 9,000
Salaries and wages payable 2,650
Interest payable 500 $ 62,150
Withdrawals during the year 25,000
Owner’s Capital, as of January 1, 2013 $ 43,250
PROBLEM 3-6B (Continued)
GATOR CONSULTING
Balance Sheet
December 31, 2014
Assets
Current assets
Cash $21,600
Accounts receivable
($85,600 + $12,600)
$98,200
Less: Allowance for
doubtful accounts
(5,250)*
92,950
Supplies 12,600
Prepaid insurance
($2,800 – $2,100)
700
Prepaid rent expense 3,000
Total current assets $ 130,850
Equipment 43,000
Less: Accumulated depreciation (15,050)** 27,950
Total assets $158,800
Liabilities and Owners’ Equity
Current liabilities
Notes payable $50,000
Unearned service revenue 9,000
Salaries and wages payable 2,650
Interest payable 500 $ 62,150
Owner’s Capital 96,650
Total liabilities and
owners’ equity
$158,800
Total liabilities and
owners’ equity
$158,800
*($1,600+ $3,650)
**($10,750 + $4,300)
?
**($10,750 + $4,300)
?
PROBLEM 3-7B
(a)
Jun. 30 Accounts Receivable 700
Service Revenue 700
Jun. 30 Accounts Receivable 700
Service Revenue 700
30 Rent Expense 600
Prepaid Rent Expense 600
Prepaid Rent Expense 600
30 Supplies Expense 750
Supplies 750
Supplies 750
30 Depreciation Expense 650
Accumulated Depreciation-Equipment 650
Accumulated Depreciation-Equipment 650
30 Interest Expense 500
Interest Payable 500
Interest Payable 500
30 Unearned Rent Revenue 1,400
Rent Revenue 1,400
Rent Revenue 1,400
30 Salaries and Wages Expense 1,600
Salaries and Wages Payable 1,600
Salaries and Wages Payable 1,600
(b) AUSTIN SPORTS INC.
Income Statement
For the Quarter Ended June 30, 2014
Revenues
Service revenue $36,150
Rent revenue 2,600
Total revenue $38,750
Expenses
Salaries and wages expense $21,700
Rent expense 2,200
Utilities expense 950
Supplies expense 750
Depreciation expense 650
Interest expense 500
Total expenses 26,750
Net income $ 12,000
Income Statement
For the Quarter Ended June 30, 2014
Revenues
Service revenue $36,150
Rent revenue 2,600
Total revenue $38,750
Expenses
Salaries and wages expense $21,700
Rent expense 2,200
Utilities expense 950
Supplies expense 750
Depreciation expense 650
Interest expense 500
Total expenses 26,750
Net income $ 12,000
PROBLEM 3-7B (Continued)
AUSTIN SPORTS INC.
Retained Earnings Statement
For the Quarter Ended June 30, 2014
Retained earnings, April 1 $ 0
Add: Net income 12,000
Less: Dividends (5600)
Retained earnings, June 30 $11,500
Retained Earnings Statement
For the Quarter Ended June 30, 2014
Retained earnings, April 1 $ 0
Add: Net income 12,000
Less: Dividends (5600)
Retained earnings, June 30 $11,500
AUSTIN SPORTS INC.
Balance Sheet
June 30, 2012
Assets
Current assets
Cash $12,500
Accounts receivable 7,200
Supplies 850
Total current assets $ 20,550
Equipment 26,000
Less: Accumulated depreciation (650) 25,350
Total assets $45,900
Balance Sheet
June 30, 2012
Assets
Current assets
Cash $12,500
Accounts receivable 7,200
Supplies 850
Total current assets $ 20,550
Equipment 26,000
Less: Accumulated depreciation (650) 25,350
Total assets $45,900
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable $20,000
Accounts payable 1,200
Salaries and wages payable 1,600
Unearned rent revenue 600
Interest payable 500 $ 23,900
Current liabilities
Notes payable $20,000
Accounts payable 1,200
Salaries and wages payable 1,600
Unearned rent revenue 600
Interest payable 500 $ 23,900
Stockholders’ Equity
Common stock 10,500
Retained earnings 11,500
Total stockholders’ equity 22,000
Total liabilities and
stockholders’ equity
$45,900
Common stock 10,500
Retained earnings 11,500
Total stockholders’ equity 22,000
Total liabilities and
stockholders’ equity
$45,900
PROBLEM 3-7B (Continued)
(c) The following accounts would be closed: Service Revenue, Rent Revenue, Salaries and Wages Expense, Rent Expense, Utilities Expense, Depreciation Expense, Supplies Expense, Interest Expense, Dividends.
(d) Interest of 10% per year equals a monthly rate of 0.833%; monthly interest is $166.67 ($20,000 X 0.833%). Since total interest expense is $500, the note has been outstanding three months.
?
PROBLEM 3-8B
?
PROBLEM 3-8B
(a)
Dec. 31 Accounts Receivable 2,000
Service Revenue 2,000
Dec. 31 Accounts Receivable 2,000
Service Revenue 2,000
31 Supplies Expense 1,850
Supplies 1,850
Supplies 1,850
31 Insurance Expense 1,300
Prepaid Insurance 1,300
Prepaid Insurance 1,300
31 Depreciation Expense 5,700
Accumulated Depreciation-Equipment 5,700
Accumulated Depreciation-Equipment 5,700
31 Interest Expense 1,350
Interest Payable 1,350
Interest Payable 1,350
31 Unearned Service Revenue 1,500
Service Revenue 1,500
Service Revenue 1,500
31 Salaries and Wages Expense 1,300
Salaries and Wages Payable 1,300
Salaries and Wages Payable 1,300
Revenues
Service revenue $90,200
Expenses
Salaries and wages expense $48,250
Rent expense 12,500
Depreciation expense 5,700
Supplies expense 1,850
Insurance expense 1,300
Interest expense 1,350
Total expenses 70,950
Net income $19,250
PROBLEM 3-8B (Continued)
Service revenue $90,200
Expenses
Salaries and wages expense $48,250
Rent expense 12,500
Depreciation expense 5,700
Supplies expense 1,850
Insurance expense 1,300
Interest expense 1,350
Total expenses 70,950
Net income $19,250
PROBLEM 3-8B (Continued)
BALTIC TRAVEL AGENCY
Retained Earnings Statement
For the Year Ended December 31, 2014
Retained earnings, Janaury 1 $ 6,400
Add: Net income 19,250
Less: Dividends (6,000)
Retained earnings, December 31 $19,650
Retained Earnings Statement
For the Year Ended December 31, 2014
Retained earnings, Janaury 1 $ 6,400
Add: Net income 19,250
Less: Dividends (6,000)
Retained earnings, December 31 $19,650
BALTIC TRAVEL AGENCY
Balance Sheet
December 31, 2014
Assets
Current assets
Cash $6,500
Accounts receivable 26,100
Supplies 1,800
Prepaid insurance 1,100
Total current assets $35,500
Equipment 36,900
Less: Accumulated depreciation (21,500) 15,400
Total assets $50,900
Balance Sheet
December 31, 2014
Assets
Current assets
Cash $6,500
Accounts receivable 26,100
Supplies 1,800
Prepaid insurance 1,100
Total current assets $35,500
Equipment 36,900
Less: Accumulated depreciation (21,500) 15,400
Total assets $50,900
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable $15,000
Accounts payable 1,500
Unearned service revenue 2,100
Salaries and wages payable 1,300
Interest payable 1,350 $ 21,250
Current liabilities
Notes payable $15,000
Accounts payable 1,500
Unearned service revenue 2,100
Salaries and wages payable 1,300
Interest payable 1,350 $ 21,250
Stockholders’ Equity
Common stock 10,000
Retained earnings 19,650
Total stockholders’ equity 29,650
Total liabilities and
stockholders’ equity
$50,900
Common stock 10,000
Retained earnings 19,650
Total stockholders’ equity 29,650
Total liabilities and
stockholders’ equity
$50,900
PROBLEM 3-8B (Continued)
(c) Service Revenue, Salaries and Wages Expense, Depreciation Expense, Rent Expense, Supplies Expense, Insurance Expense, Interest Expense, Dividends.
(d) Interest is $150 per month ($1,350 / 9) or 1.0% of the note payable ($150 $15,000). 1.0% X 12 = 12% interest per year.
(e) Salaries and Wages Expense, $48,250, less Salaries and Wages Payable 12/31/14, $1,300 = $46,950. Total payments, $48,000 – $46,950 = $1.050 Salaries Payable 12/31/13.
?
*PROBLEM 3-9B
*PROBLEM 3-9B
(a), (b), (d)
Cash Prepaid Insurance Salaries and Wages Expense
Bal. 9,500 Bal. 4,850 Adj. 3,000 Bal. 165,000 Close 169,600
1,850 Adj. 4,600
169,600 169,600
Common Stock
Bal. 800,000
Bal. 9,500 Bal. 4,850 Adj. 3,000 Bal. 165,000 Close 169,600
1,850 Adj. 4,600
169,600 169,600
Common Stock
Bal. 800,000
Accounts Receivable
Retained Earnings Maintenance and Repairs Expense
Bal. 23,500 Bal. 200,900 Bal. 95,000 Close 95,000
Inc. 244,300
345,200
Retained Earnings Maintenance and Repairs Expense
Bal. 23,500 Bal. 200,900 Bal. 95,000 Close 95,000
Inc. 244,300
345,200
Allow. for Doubtful Accts. Dues Revenue Depr. Expense
Bal. 3,800 Adj. 16,600 Bal. 489,600 Adj. 18,300 Close 44,400
Adj. 900 Cls. 473,000 Adj. 26,100
4,700 489,600 489,600 44,400
Bal. 3,800 Adj. 16,600 Bal. 489,600 Adj. 18,300 Close 44,400
Adj. 900 Cls. 473,000 Adj. 26,100
4,700 489,600 489,600 44,400
Land Green Fees Revenue
Bal. 650,000 Close 121,000 Bal. 121,000
Bal. 650,000 Close 121,000 Bal. 121,000
Buildings Rent Revenue Accum. Depr.-Equipment
Bal. 549,000 Close 28,800 Bal. 26,400 Bal. 121,850
Adj. 2,400 Adj. 26,100
28,800 28,800 147,950
Bal. 549,000 Close 28,800 Bal. 26,400 Bal. 121,850
Adj. 2,400 Adj. 26,100
28,800 28,800 147,950
Accum. Depr.-Buildings Utilities Expenses Insurance Expense
Bal. 59,900 Bal. 65,600 Close 65,600 Adj. 3,000 Close 3,000
Adj. 18,300
78,200
Bal. 59,900 Bal. 65,600 Close 65,600 Adj. 3,000 Close 3,000
Adj. 18,300
78,200
Rent Receivable Bad Debt Expense Income Summary
Adj. $2,400 Adj. 900 Close 900 Exp. 378,500 Rev. 622,800
Inc. 244,300
622,800 622,800
Adj. $2,400 Adj. 900 Close 900 Exp. 378,500 Rev. 622,800
Inc. 244,300
622,800 622,800
*PROBLEM 3-9B (Continued)
Salaries and Wages Payable
Unearned Dues Revenue
Adj. 4,600 Adj. 16,600
Salaries and Wages Payable
Unearned Dues Revenue
Adj. 4,600 Adj. 16,600
Equipment
Bal. 261,000
(b) -1-
Depreciation Expense 18,300
Accumulated Depreciation-Buildings
(1/30 X $549,000) 18,300
Bal. 261,000
(b) -1-
Depreciation Expense 18,300
Accumulated Depreciation-Buildings
(1/30 X $549,000) 18,300
-2-
Depreciation Expense 26,100
Accumulated Depreciation-Equipment
(10% X $261,000) 26,100
Depreciation Expense 26,100
Accumulated Depreciation-Equipment
(10% X $261,000) 26,100
-3-
Insurance Expense 3,000
Prepaid Insurance 3,000
Insurance Expense 3,000
Prepaid Insurance 3,000
-4-
Rent Receivable 2,400
Rent Revenue
(1/11 X $26,400) 2,400
Rent Receivable 2,400
Rent Revenue
(1/11 X $26,400) 2,400
-5-
Bad Debt Expense 900
Allowance for Doubtful Accounts
?[($23,500 X 20%) – $3,800] 900
Bad Debt Expense 900
Allowance for Doubtful Accounts
?[($23,500 X 20%) – $3,800] 900
-6-
Salaries and Wages Expense 4,600
Salaries and Wages Payable 4,600
Salaries and Wages Expense 4,600
Salaries and Wages Payable 4,600
-7-
Dues Revenue 16,600
Unearned Dues Revenue 16,600
Dues Revenue 16,600
Unearned Dues Revenue 16,600
*PROBLEM 3-9B (Continued)
(c) ALI GOLF AND TENNIS CLUB, INC.
Adjusted Trial Balance
December 31, XXXX
Dr. Cr.
Cash $ 9,500
Accounts Receivable 23,500
Allowance for Doubtful Accounts $ 4,700
Prepaid Insurance 1,850
Land 650,000
Buildings 549,000
Accum. Depreciation-Buildings 78,200
Equipment 261,000
Accum. Depreciation-Equipment 147,950
Salaries and Wages Payable 4,600
Common Stock 800,000
Retained Earnings 200,900
Dues Revenue 473,000
Green Fees Revenue 121,000
Rent Revenue 28,800
Utilities Expense 65,600
Salaries and Wages Expense 169,600
Maintenance and Repairs Expenses 95,000
Bad Debt Expense 900
Unearned Dues Revenue 16,600
Rent Receivable 2,400
Depreciation Expense 44,400
Insurance Expense 3,000
Totals $1,875,750 $1,875,750
*PROBLEM 3-9B (Continued)
(d) -Dec. 31-
Dues Revenue 473,000
Green Fees Revenue 121,000
Rent Revenue 28,800
Income Summary 622,800
(c) ALI GOLF AND TENNIS CLUB, INC.
Adjusted Trial Balance
December 31, XXXX
Dr. Cr.
Cash $ 9,500
Accounts Receivable 23,500
Allowance for Doubtful Accounts $ 4,700
Prepaid Insurance 1,850
Land 650,000
Buildings 549,000
Accum. Depreciation-Buildings 78,200
Equipment 261,000
Accum. Depreciation-Equipment 147,950
Salaries and Wages Payable 4,600
Common Stock 800,000
Retained Earnings 200,900
Dues Revenue 473,000
Green Fees Revenue 121,000
Rent Revenue 28,800
Utilities Expense 65,600
Salaries and Wages Expense 169,600
Maintenance and Repairs Expenses 95,000
Bad Debt Expense 900
Unearned Dues Revenue 16,600
Rent Receivable 2,400
Depreciation Expense 44,400
Insurance Expense 3,000
Totals $1,875,750 $1,875,750
*PROBLEM 3-9B (Continued)
(d) -Dec. 31-
Dues Revenue 473,000
Green Fees Revenue 121,000
Rent Revenue 28,800
Income Summary 622,800
-31-
Income Summary 378,500
Utilities Expense 65,600
Bad Debt Expense 900
Salaries and Wages Expense 169,600
Maintenance Expense 95,000
Depreciation Expense 44,400
Insurance Expense 3,000
Income Summary 378,500
Utilities Expense 65,600
Bad Debt Expense 900
Salaries and Wages Expense 169,600
Maintenance Expense 95,000
Depreciation Expense 44,400
Insurance Expense 3,000
-31-
Income Summary 244,300
Retained Earnings 244,300
?
*PROBLEM 3-10B
Income Summary 244,300
Retained Earnings 244,300
?
*PROBLEM 3-10B
(a), (b), (c)
Cash Accounts Receivable Allow. for Doubtful Accts.
Bal. 23,850 Bal. 16,000 Bal. 600
Adj. 1,600
2,200
Cash Accounts Receivable Allow. for Doubtful Accts.
Bal. 23,850 Bal. 16,000 Bal. 600
Adj. 1,600
2,200
Inventory Equipment Accum. Depr.-Equipment
Bal. 73,600 Bal. 60,000 Bal. 26,000
Adj. 7,500
33,500
Bal. 73,600 Bal. 60,000 Bal. 26,000
Adj. 7,500
33,500
Prepaid Insurance Notes Payable Accounts Payable
Bal. 5,200 Adj. 3,650 Bal. 21,000 Bal. 18,400
1,550
Bal. 5,200 Adj. 3,650 Bal. 21,000 Bal. 18,400
1,550
Common Stock Sales Revenue Insurance Expense
Bal. 10,000 Cls. 397,300 Bal. 397,300 Adj. 3,650 Cls. 3,650
Bal. 10,000 Cls. 397,300 Bal. 397,300 Adj. 3,650 Cls. 3,650
Salaries and Wages Expense (Sales)
Advertising Expense Salaries and Wages Expense (Administrative)
Bal. 56,850 Cls. 59,600 Bal. 26,700 Adj. 1,100 Adj. 79,300 Cls. 79,300
Adj. 2,750 Cls. 25,600
59,600 59,600 26,700 26,700
Advertising Expense Salaries and Wages Expense (Administrative)
Bal. 56,850 Cls. 59,600 Bal. 26,700 Adj. 1,100 Adj. 79,300 Cls. 79,300
Adj. 2,750 Cls. 25,600
59,600 59,600 26,700 26,700
Bad Debt Expense Supplies Expense Prepaid Advertising
Adj. 1,600 Cls. 1,600 Bal. 4,200 Adj. 900 Adj. 1,100
Cls. 3,300
4,200 4,200
Adj. 1,600 Cls. 1,600 Bal. 4,200 Adj. 900 Adj. 1,100
Cls. 3,300
4,200 4,200
Interest Payable Depreciation Expense Income Summary
Adj. 2,050 Adj. 7,500 Cls. 7,500 Exp. 386,750 Rev. 397,300
Inc. 10,550
397,300 397,300
Adj. 2,050 Adj. 7,500 Cls. 7,500 Exp. 386,750 Rev. 397,300
Inc. 10,550
397,300 397,300
Supplies Salaries and Wages Payable Interest Expense
Adj. 900 Adj. 2,750 Adj. 2,050 Cls. 2,050
Adj. 900 Adj. 2,750 Adj. 2,050 Cls. 2,050
Retained Earnings Cost of Goods Sold
Bal. 76,550 Bal. 204,150 Cls. 204,150
Inc. 10,550
Bal. 87,100
Bal. 76,550 Bal. 204,150 Cls. 204,150
Inc. 10,550
Bal. 87,100
*PROBLEM 3-10B (Continued)
(b) -1-
Bad Debt Expense 1,600
Allowance for Doubtful Accounts 1,600
Bad Debt Expense 1,600
Allowance for Doubtful Accounts 1,600
-2-
Depreciation Expense ($60,000 8) 7,500
Accumulated Depreciation-Equipment 7,500
Depreciation Expense ($60,000 8) 7,500
Accumulated Depreciation-Equipment 7,500
Intermediate Accounting 9th Edition Solution
-3-
Insurance Expense 3,650
Prepaid Insurance 3,650
Insurance Expense 3,650
Prepaid Insurance 3,650
-4-
Interest Expense 2,050
Interest Payable 2,050
Interest Expense 2,050
Interest Payable 2,050
-5-
Salaries and Wages Expense (Sales) 2,750
Salaries and Wages Payable 2,750
Salaries and Wages Expense (Sales) 2,750
Salaries and Wages Payable 2,750
-6-
Prepaid Advertising Expense 1,100
Advertising Expense 1,100
Prepaid Advertising Expense 1,100
Advertising Expense 1,100
-7-
Supplies 900
Supplies Expense 900
*PROBLEM 3-10B (Continued)
Supplies 900
Supplies Expense 900
*PROBLEM 3-10B (Continued)
(c) Dec. 31
Sales Revenue 397,300
Income Summary 397,300
Sales Revenue 397,300
Income Summary 397,300
Dec. 31
Income Summary 386,750
Cost of Goods Sold 204,150
Advertising Expense 25,600
Salaries and Wages Expense (Admin.) 79,300
Salaries and Wages Expense (Sales) 59,600
Supplies Expense 3,300
Insurance Expense 3,650
Bad Debt Expense 1,600
Depreciation Expense 7,500
Interest Expense 2,050
Income Summary 386,750
Cost of Goods Sold 204,150
Advertising Expense 25,600
Salaries and Wages Expense (Admin.) 79,300
Salaries and Wages Expense (Sales) 59,600
Supplies Expense 3,300
Insurance Expense 3,650
Bad Debt Expense 1,600
Depreciation Expense 7,500
Interest Expense 2,050
Dec. 31
Income Summary 10,550
Retained Earnings 10,550
?
*PROBLEM 3-11B
(a) LAMBCHOP REFRIGERATION SALES AND SERVICE
Income Statement
For the Month Ended January 31, 2014
(1)
Cash Basis (2)
Accrual Basis
Revenues $ 19,250 $39,600*
Income Summary 10,550
Retained Earnings 10,550
?
*PROBLEM 3-11B
(a) LAMBCHOP REFRIGERATION SALES AND SERVICE
Income Statement
For the Month Ended January 31, 2014
(1)
Cash Basis (2)
Accrual Basis
Revenues $ 19,250 $39,600*
Expenses
Cost of computers & printers:
Purchased and paid 33,000**
Cost of goods sold 19,800***
Salaries and wages 6,500 10,600
Rent 9,300 3,100
Other operating expenses 2,200 3,050
Total expenses 51,000 36,550
Net income (loss) $(31,750) $3,050
Cost of computers & printers:
Purchased and paid 33,000**
Cost of goods sold 19,800***
Salaries and wages 6,500 10,600
Rent 9,300 3,100
Other operating expenses 2,200 3,050
Total expenses 51,000 36,550
Net income (loss) $(31,750) $3,050
*($3,100 X 6) + ($1,750 X 12)
**($1,500 X 10) + ($900 X 20)
***($1,500 X 6) + ($900 X 12)
**($1,500 X 10) + ($900 X 20)
***($1,500 X 6) + ($900 X 12)
*PROBLEM 3-11B (Continued)
(b) LAMBCHOP REFRIGERATION SALES AND SERVICE
Balance Sheet
As of January 31, 2014
(1)
Cash Basis (2)
Accrual Basis
Assets
Cash $68,250a $ 68,250a
Accounts receivable 20,350
Inventory 13,200b
Prepaid rent expense 6,200
Total assets $68,250 $108,000
(b) LAMBCHOP REFRIGERATION SALES AND SERVICE
Balance Sheet
As of January 31, 2014
(1)
Cash Basis (2)
Accrual Basis
Assets
Cash $68,250a $ 68,250a
Accounts receivable 20,350
Inventory 13,200b
Prepaid rent expense 6,200
Total assets $68,250 $108,000
Liabilities and Owners’ Equity
Salaries and wages payable $ 4,100
Accounts payable 850
Owner’s capital $68,250c 103,050d
Total liabilities and owners’
equity
$68,250
$108,000
aOriginal investment $ 100,000
Cash sales 19,250
Cash purchases (33,000)
Rent paid (9,300)
Salaries paid (6,500)
Other operating expenses (2,200)
Cash balance Jan. 31 $ 68,250
Salaries and wages payable $ 4,100
Accounts payable 850
Owner’s capital $68,250c 103,050d
Total liabilities and owners’
equity
$68,250
$108,000
aOriginal investment $ 100,000
Cash sales 19,250
Cash purchases (33,000)
Rent paid (9,300)
Salaries paid (6,500)
Other operating expenses (2,200)
Cash balance Jan. 31 $ 68,250
b(4 @ $1,500) + (8 @ $900).
cInitial investment minus net loss: $100,000 – $31,750.
dInitial investment plus net income: $100,000 + $3,050.
*PROBLEM 3-11B (Continued)
(c) 1. The $20,350 in receivables from customers is an asset and a future cash flow resulting from sales that is ignored. The cash basis understates the amount of revenues and inflow of assets in January from the sale of computers and printers by $20,350.
2. The cost of computers and printers sold in January is overstated by $13,200. The unsold computers and printers are an asset of $13,200 in the form of inventory.
3. The cash basis ignores $4,100 of the salaries that have been earned by the employees in January and will be paid in February.
4. Rent expense on the cash basis is overstated by $6,200 under the cash basis. This prepayment is an asset in the form of two months’ future right to the use of office, showroom, and repair space and should appear on the balance sheet.
5. Other operating expenses on a cash basis are understated by $850 as is the liability for the unpaid portion of these expenses incurred in January.
Intermediate Accounting 9th Edition Solution Manual Free
?
*PROBLEM 3-12B
*PROBLEM 3-12B
(a) COOKE COMPANY Worksheet For the Year Ended September 30, 2012
Balance Sheet Cr. 63,800 8,500 2,600 60,000 117,490 3,000 2,500 257,890 94,360 352,250 Key: (a) Expired Insurance; (b) Supplies Used; (c) Depreciation Expensed; (d) Admission Revenue Earned; (e) Accrued Property Taxes; (f) Accrued Interest Payable.
Dr. 36,500 6,200 4,550 105,000 164,000 36,000 ______ 352,250 ______ 352,250
Income Statement Cr. 365,110 ______ 365,110 ______ 365,110
Dr. 133,700
26,500 31,000 29,500 9,000 9,000 14,350 6,400 11,300 ______ 170,750 94,360 365,110
Adjusted Trial Balance Cr. 63,800 8,500 2,600 60,000 117,490 365,110 3,000 2,500 623,000
Dr. 36,500 6,200 4,550 105,000 164,000 36,000 133,700
26,500 31,000 29,500 9,000 9,000 14,350 6,400 11,300 ______ 623,000
Balance Sheet Cr. 63,800 8,500 2,600 60,000 117,490 3,000 2,500 257,890 94,360 352,250 Key: (a) Expired Insurance; (b) Supplies Used; (c) Depreciation Expensed; (d) Admission Revenue Earned; (e) Accrued Property Taxes; (f) Accrued Interest Payable.
Dr. 36,500 6,200 4,550 105,000 164,000 36,000 ______ 352,250 ______ 352,250
Income Statement Cr. 365,110 ______ 365,110 ______ 365,110
Dr. 133,700
26,500 31,000 29,500 9,000 9,000 14,350 6,400 11,300 ______ 170,750 94,360 365,110
Adjusted Trial Balance Cr. 63,800 8,500 2,600 60,000 117,490 365,110 3,000 2,500 623,000
Dr. 36,500 6,200 4,550 105,000 164,000 36,000 133,700
26,500 31,000 29,500 9,000 9,000 14,350 6,400 11,300 ______ 623,000
Adjustments Cr. 6,400 14,350 11,300 3,610 3,000 2,500 41,160
(b) (a) (c) (d) (f) (e)
Dr. 3,610 2,500 3,000 14,350 6,400 11,300 _____ 41,160
(d) (e) (f) (a) (b) (c)
(b) (a) (c) (d) (f) (e)
Dr. 3,610 2,500 3,000 14,350 6,400 11,300 _____ 41,160
(d) (e) (f) (a) (b) (c)
Trial Balance Cr. 52,500 8,500 6,210 60,000 117,490 361,500 ______ 606,200
Dr. 36,500 12,600 18,900 105,000 164,000 36,000 133,700
26,500 31,000 29,500 6,500 6,000 606,200
Dr. 36,500 12,600 18,900 105,000 164,000 36,000 133,700
26,500 31,000 29,500 6,500 6,000 606,200
Account Titles Cash Supplies Prepaid Insurance Land Equipment Accum. Depr.-Equip. Accounts Payable Unearned Adm. Rev. Mortgage Payable Owner’s Capital Owner’s Drawings Admissions Revenue Sal. and Wages Exp. Maintenance and Repairs Expense Advertising Expense Utilities Expenses Prop. Tax Expense Interest Expense Totals Insurance Expense Supplies Expense Interest Payable Depreciation Expense Prop. Taxes Payable Totals Net Income Totals
*PROBLEM 3-12B (Continued)
(b) YOUNG COMPANY
Balance Sheet
June 30, 2014
Assets
Current assets
Cash $36,500
Supplies 6,200
Prepaid insurance 4,550
Total current assets $ 47,250
Property, plant, and equipment
Land 105,000
Equipment $164,000
Less: Accum. depreciation 63,800 100,200 205,200
Total assets $252,450
Liabilities and Owners’ Equity
Current liabilities
Accounts payable $ 8,500
Current maturity of long-term debt 12,000
Interest payable 3,000
Property taxes payable 2,500
Unearned admissions revenue 2,600
Total current liabilities $ 28,600
Long-term liabilities
Mortgage payable 48,000
Total liabilities 76,600
Owner’s equity
Owner’s capital
($117,490 + $94,360 – $36,000)
175,850
Total liabilities and owners’ equity $252,450
*PROBLEM 3-12B (Continued)
(b) YOUNG COMPANY
Balance Sheet
June 30, 2014
Assets
Current assets
Cash $36,500
Supplies 6,200
Prepaid insurance 4,550
Total current assets $ 47,250
Property, plant, and equipment
Land 105,000
Equipment $164,000
Less: Accum. depreciation 63,800 100,200 205,200
Total assets $252,450
Liabilities and Owners’ Equity
Current liabilities
Accounts payable $ 8,500
Current maturity of long-term debt 12,000
Interest payable 3,000
Property taxes payable 2,500
Unearned admissions revenue 2,600
Total current liabilities $ 28,600
Long-term liabilities
Mortgage payable 48,000
Total liabilities 76,600
Owner’s equity
Owner’s capital
($117,490 + $94,360 – $36,000)
175,850
Total liabilities and owners’ equity $252,450
*PROBLEM 3-12B (Continued)
(c) Jun. 30 Insurance Expense 14,350
Prepaid Insurance 14,350
Prepaid Insurance 14,350
30 Supplies Expense 6,400
Supplies 6,400
Supplies 6,400
30 Depreciation Expense 11,300
Accum. Depreciation-
Equipment
11,300
Accum. Depreciation-
Equipment
11,300
30 Unearned Admissions Revenue 3,610
Admissions Revenue 3,610
Admissions Revenue 3,610
30 Property Tax Expense 2,500
Property Taxes Payable 2,500
Property Taxes Payable 2,500
30 Interest Expense 3,000
Interest Payable 3,000
Interest Payable 3,000
(d) Jun. 30 Admissions Revenue 365,110
Income Summary 365,110
Income Summary 365,110
30 Income Summary 270,750
Salaries and Wages Expense 133,700
Advertising Expense 31,000
Utilities Expenses 29,500
Maintenance and Repairs
Expenses
26,500
Insurance Expense 14,350
Depreciation Expense 11,300
Property Tax Expense 9,000
Interest Expense 9,000
Supplies Expense 6,400
Salaries and Wages Expense 133,700
Advertising Expense 31,000
Utilities Expenses 29,500
Maintenance and Repairs
Expenses
26,500
Insurance Expense 14,350
Depreciation Expense 11,300
Property Tax Expense 9,000
Interest Expense 9,000
Supplies Expense 6,400
30 Income Summary 94,360
Owner’s Capital 94,360
Owner’s Capital 94,360
30 Owner’s Capital 36,000
Owner’s Drawings 36,000
Owner’s Drawings 36,000
*PROBLEM 3-12B (Continued)
(e) YOUNG COMPANY
Post-Closing Trial Balance
June 30, 2014
Debit Credit
Cash $ 36,500
Supplies 6,200
Prepaid Insurance 4,550
Land 105,000
Equipment 164,000
Accumulated Depreciation $ 63,800
Accounts Payable 8,500
Unearned Admissions Revenue 2,600
Interest Payable 3,000
Property Tax Payable 2,500
Mortgage Payable 60,000
Owner’s Capital 175,850
$316,250 $316,250
Post-Closing Trial Balance
June 30, 2014
Debit Credit
Cash $ 36,500
Supplies 6,200
Prepaid Insurance 4,550
Land 105,000
Equipment 164,000
Accumulated Depreciation $ 63,800
Accounts Payable 8,500
Unearned Admissions Revenue 2,600
Interest Payable 3,000
Property Tax Payable 2,500
Mortgage Payable 60,000
Owner’s Capital 175,850
$316,250 $316,250