Академический Документы
Профессиональный Документы
Культура Документы
com
CHAPTER 1
Accounting in Action
Brief A B
Learning Objectives Questions Exercises Do It! Exercises Problems Problems
1. Explain what 1, 2, 5 1 1
accounting is.
4. Explain accounting 6 1 4
standards and the
measurement principles.
6. State the accounting 11, 12, 13, 1, 2, 3, 2 5, 6, 1A, 2A, 1B, 2B,
equation, and define 14, 22 4, 5, 8, 9 7, 11 4A 4B
its components.
8. Understand the four 17, 18, 19, 10, 11 4 8, 9, 12, 13, 2A, 3A, 2B, 3B,
financial statements 20, 21 14, 15, 16, 17 4A, 5A 4B, 5B
and how they are
prepared.
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-1
iiqtisad.blogspot.com
ASSIGNMENT CHARACTERISTICS TABLE
1-2 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
WEYGANDT FINANCIAL ACCOUNTING, IFRS Version, 2e
CHAPTER 1
ACCOUNTING IN ACTION
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-3
iiqtisad.blogspot.com
ACCOUNTING IN ACTION (Continued)
1-4 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
1. Yes, this is correct. Virtually every organization and person in our society uses accounting
information. Businesses, investors, creditors, government agencies, and not-for-profit organizations
must use accounting information to operate effectively.
2. Accounting is the process of identifying, recording, and communicating the economic events of
an organization to interested users of the information. The first step of the accounting process is
therefore to identify economic events that are relevant to a particular business. Once identified
and measured, the events are recorded to provide a history of the financial activities of the
organization. Recording consists of keeping a chronological diary of these measured events in an
orderly and systematic manner. The information is communicated through the preparation and
distribution of accounting reports, the most common of which are called financial statements.
A vital element in the communication process is the accountant’s ability and responsibility to
analyze and interpret the reported information.
3. (a) Internal users are those who plan, organize, and run the business and therefore are officers
and other decision makers.
(b) To assist management, accounting provides internal reports. Examples include financial
comparisons of operating alternatives, projections of income from new sales campaigns,
and forecasts of cash needs for the next year.
4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell shares.
(b) Creditors use accounting information to evaluate the risks of granting credit or lending money.
5. No, this is incorrect. Bookkeeping usually involves only the recording of economic events and
therefore is just one part of the entire accounting process. Accounting, on the other hand, involves
the entire process of identifying, recording, and communicating economic events.
6. Jackie Remmers Travel Agency should report the land at $85,000 on its December 31, 2014
statement of financial position. This is true not only at the time the land is purchased, but also
over the time the land is held. In determining which measurement principle to use (cost or fair
value) companies weigh the factual nature of cost figures versus the relevance of fair value. In
general, companies use cost. Only in situations where assets are actively traded do companies
apply the fair value principle extensively. An important concept that accountants follow is the
historical cost principle.
7. The monetary unit assumption requires that only transaction data capable of being expressed in
terms of money be included in the accounting records. This assumption enables accounting to
quantify (measure) economic events.
8. The economic entity assumption requires that the activities of the entity be kept separate and
distinct from the activities of its owners and all other economic entities.
9. The three basic forms of business organizations are: (1) proprietorship, (2) partnership, and
(3) corporation.
1-6 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
Questions Chapter 1 (Continued)
10. One of the advantages Teresa Alvarez would enjoy is that ownership of a corporation is repre-
sented by transferable shares. This would allow Teresa to raise money easily by selling
a part of her ownership in the company. Another advantage is that because holders of the shares
(shareholders) enjoy limited liability, they are not personally liable for the debts of the corporate
entity. Also, because ownership can be transferred without dissolving the corporation, the corporation
enjoys an unlimited life.
12. (a) Assets are resources owned by a business. Liabilities are claims against assets. Put more
simply, liabilities are existing debts and obligations. Equity is the ownership claim on total
assets.
(b) Equity is affected by shareholders’ investments, dividends, revenues, and expenses.
13. The liabilities are: (b) Accounts payable and (g) Salaries and wages payable.
14. Yes, a business can enter into a transaction in which only the left side of the accounting equation
is affected. An example would be a transaction where an increase in one asset is offset by
a decrease in another asset. An increase in the Equipment account which is offset by a decrease
in the Cash account is a specific example.
15. Business transactions are the economic events of the enterprise recorded by accountants
because they affect the basic equation.
(a) No, the death of the president of the company is not a business transaction as it does not
affect the basic equation.
(b) Yes, supplies purchased on account is a business transaction as it affects the basic equation.
(c) No, an employee being fired is not a business transaction as it does not affect the basic
equation.
18. No, this treatment is not proper. While the transaction does involve a receipt of cash, it does not
represent revenues. Revenues are the gross increase in equity resulting from business activities
entered into for the purpose of earning income. This transaction is simply an additional
investment made by one of the owners of the business.
19. Yes. Net income does appear on the income statement—it is the result of subtracting expenses
from revenues. In addition, net income appears in the retained earnings statement—it is shown
as an addition to the beginning-of-period retained earnings. Indirectly, the net income of a company
is also included in the statement of financial position. It is included in the Retained Earnings
account which appears in the equity section of the statement of financial position.
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-7
iiqtisad.blogspot.com
Questions Chapter 1 (Continued)
22. Nestle’s accounting equation (in millions of Swiss Francs) at December 31, 2010 was CHF111,641 =
CHF49,043 + CHF62,598.
1-8 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
SOLUTIONS TO BRIEF EXERCISES
Equity
Share Retained Earnings
Assets = Liabilities + Capital— + Revenues – Expenses – Dividends
Ordinary
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-9
iiqtisad.blogspot.com
BRIEF EXERCISE 1-5
1-10 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
BRIEF EXERCISE 1-10
GRANDE COMPANY
Statement of Financial Position
December 31, 2014
Assets
Accounts receivable ..................................................................... $ 72,500
Cash ............................................................................................... 44,000
Total assets ............................................................................ $116,500
DO IT! 1-1
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-11
iiqtisad.blogspot.com
DO IT! 1-2
DO IT! 1-3
DO IT! 1-4
(a) The total assets are R$51,500, comprised of Cash R$9,000, Accounts
Receivable R$13,500, and Equipment R$29,000.
Revenues
Service revenue ................................................. R$54,000
Expenses
Salaries and wages expense ............................ R$16,500
Rent expense ..................................................... 9,800
Advertising expense ......................................... 6,000
Total expenses .......................................... 32,300
Net income ................................................................ R$21,700
1-12 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
DO IT! 1-4 (Continued)
Note that it is not possible to determine the company’s equity in any other
way, because the beginning balance for equity is not provided.
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-13
iiqtisad.blogspot.com
SOLUTIONS TO EXERCISES
EXERCISE 1-1
EXERCISE 1-2
External users
Customers
Labor unions
Securities regulator
Suppliers
Taxing agency
1-14 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
EXERCISE 1-3
EXERCISE 1-4
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-15
iiqtisad.blogspot.com
2. Correct. The monetary unit assumption requires that companies include
in the accounting records only transaction data that can be expressed
in terms of money.
1-16 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
EXERCISE 1-5
EXERCISE 1-6
EXERCISE 1-7
1. (c) 5. (d)
2. (d) 6. (b)
3. (a) 7. (e)
4. (b) 8. (f)
EXERCISE 1-8
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-17
iiqtisad.blogspot.com
EXERCISE 1-8 (Continued)
EXERCISE 1-9
Revenues
Service revenue ........................................................ $9,100
Expenses
Salaries and wages expense .................................... $3,900
Rent expense ............................................................ 650
Utilities expense ....................................................... 500
Total expenses .................................................. 5,050
Net income ........................................................................ $4,050
1-18 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
EXERCISE 1-9 (Continued)
Assets
Equipment........................................................................ $ 5,000
Supplies ........................................................................... 750
Accounts receivable ....................................................... 4,050
Cash ................................................................................. 9,250
Total assets .............................................................. $19,050
EXERCISE 1-10
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-19
iiqtisad.blogspot.com
EXERCISE 1-10 (Continued)
EXERCISE 1-11
1-20 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
EXERCISE 1-11 (Continued)
EXERCISE 1-12
Revenues
Service revenue .................................................... $62,500
Expenses
Salaries and wages expense ............................... $28,000
Rent expense ........................................................ 10,400
Utilities expense ................................................... 3,100
Advertising expense ............................................. 1,800
Total expenses .............................................. 43,300
Net income .................................................................... $19,200
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-21
iiqtisad.blogspot.com
EXERCISE 1-13
SANCULI COMPANY
Statement of Financial Position
December 31, 2014
Assets
Equipment ........................................................................ €48,000
Supplies ........................................................................... 8,000
Accounts receivable........................................................ 8,500
Cash ................................................................................. 14,000
Total assets .............................................................. €78,500
EXERCISE 1-14
Assets
Equipment .............................................................................. $105,500
Supplies .................................................................................. 2,500
Cash ........................................................................................ 20,000
Total assets .................................................................... $128,000
1-22 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
EXERCISE 1-14 (Continued)
BEAR PARK
Statement of Financial Position (Continued)
December 31, 2014
Equity and Liabilities
Equity
Share capital—ordinary .................................. $20,000
Retained earnings ........................................... 37,000
Total equity .............................................. $ 57,000
Liabilities
Notes payable .................................................. 60,000
Accounts payable ........................................... 11,000
Total liabilities.......................................... 71,000
Total equity and liabilities ....................................... $128,000
EXERCISE 1-15
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-23
iiqtisad.blogspot.com
EXERCISE 1-16
EXERCISE 1-17
JAVA COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
(Amounts in thousands)
Cash flows from operating activities
Cash receipts from revenues .......................... Rp600,000
Cash payments for expenses ......................... (430,000)
Net cash provided by operating activities 170,000
Cash flows from investing activities
Purchase of equipment ................................... (100,000)
Cash flows from financing activities ......................
Sale of ordinary shares ................................... Rp280,000
Payment of cash dividends ............................. (20,000) 260,000
Net increase in cash ................................................ 330,000
Cash at the beginning of the period ....................... 30,000
Cash at the end of the period ................................. Rp360,000
1-24 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
1. +£10,000 +£10,000 +
+ 10,000 = 0010,000
2. + –5,000 +£5,000 +000,
SOLUTIONS TO PROBLEMS
+ 5,000 + + 5,000 = + 0010,000 +
3. + –400 +00,000 –£400 (a)
+ 4,600 + + 5,000 = + 10,000 + –400
4. + –500 +£500 +00,000 +
PROBLEM 1-1A
+ 4,100 + + 500 + + 5,000 = + 10,000000
+ –400
5. +000,000 +0000 +00,000 +£250 –250 (b)
+ 4,100 + + 500 + + 5,000 = + 250 + 00010,000000
+ –650
6. –+4,700 +0000 +00,000 +0000 +£4,700 (c)
+ 8,800 + + 500 + + 5,000 = + 250 + 00010,000 + 4,700 –650
7. –1,000 +0000 +00,000 +0000 0 –£1,000 (d)
+ 7,800 + + 500 + + 5,000 = + 250 + 10,000 + 4,700 –650 –1,000
8. + –1,000 +0000 +00,000 +0000 –1,000 (e)
+ 6,800 + + 500 + + 5,000 = + 250 + 10,000 + 4,700 –1,650 –1,000
9. + –140 +0000 +00,000 +0000 –140 (f)
+ 6,660 + + 500 + + 5,000 = +0250 + 10,000 + 4,700 –1,790 –1,000
10. +000,000 +£980 +0000 +00,000 +0000 +980 (g)
+ 6,660 + + 980 + + 500 + + 5,000 = +0250 + 10,000 + 5,680 –1,790 –1,000
11. – +120 +–120
+£ 6,780 + +£860 + +£500 + +£5,000 = +£250 + £10,000 + £5,680 – £1,790 – £1,000
£13,140 £13,140
1-25
iiqtisad.blogspot.com
PROBLEM 1-1A (Continued)
1-26 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solution’s Manual (For Instructor Use Only)
1-26
iiqtisad.blogspot.com
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
PROBLEM 1-2A
9,100 + 5,200 + 600 + 8,100 = 2,000 + 13,000 + 700 7,300
5. –400 00,000 0000 000,000 00,000 –$400
8,700 + 5,200 + 600 + 8,100 = 2,000 + 13,000 + 700 7,300 –400
–$1,700
–900
6. –2,800 00,000 0000 000,000 00,000 –200
5,900 + 5,200 + 600 + 8,100 = 2,000 + 13,000 + 700 7,300 –2,800 –400
7. 000,000 00,000 0000 000,000 +170 –170
5,900 + 5,200 + 600 + 8,100 = 2,170 + 13,000 + 700 7,300 –2,970 –400
8. +10,000 +$10,000
$15,900 + $5,200 + $600 + $ 8,100 = +$10,000 + $2,170 + $13,000 + $700 + $7,300 – $ 2,970 – $400
$29,800 $29,800
1-27
iiqtisad.blogspot.com
PROBLEM 1-2A (Continued)
Revenues
Service revenue ................................................. $7,300
Expenses
Salaries and wages expense ............................ $1,700
Rent expense ..................................................... 900
Advertising expense ......................................... 200
Utilities expense ................................................ 170
Total expenses ........................................... 2,970
Net income ................................................................ $4,330
1-28 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solution’s Manual (For Instructor Use Only)
iiqtisad.blogspot.com
PROBLEM 1-2A (Continued)
Assets
Equipment ................................................................... $ 8,100
Supplies ...................................................................... 600
Accounts receivable ................................................... 5,200
Cash............................................................................. 15,900
Total assets ......................................................... $29,800
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-29
iiqtisad.blogspot.com
PROBLEM 1-3A
Revenues
Service revenue ........................................... W6,800
Expenses
Gasoline expense ........................................ W2,500
Rent expense ............................................... 1,200
Advertising expense ................................... 500
Utilities expense .......................................... 400
Maintenance and repairs expense ............. 400
Total expenses ..................................... 5,000
Net income .......................................................... W 1,800
1-30 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solution’s Manual (For Instructor Use Only)
iiqtisad.blogspot.com
PROBLEM 1-3A (Continued)
Revenues
Service revenue (W6,800 + W900) ............... W7,700
Expenses
Gasoline expense (W2,500 + W1,500) ......... W4,000
Rent expense ................................................ 1,200
Advertising expense .................................... 500
Utilities expense ........................................... 400
Maintenance and repairs expense .............. 400
Total expenses...................................... 6,500
Net income ........................................................... W1,200
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-31
iiqtisad.blogspot.com
1-32
PROBLEM 1-4A
+ 7,500 + 4,800 + +0014,000 = 12,000 + 10,000 + 4,800 –500
June 9 + –300 –$300 (c)
7,2000+ 4,800 + +050 + 14,000 = 12,000 + 10,000 + 4,800 – –500 – –300
June 12 +$150 +$150
– 7,200 + 4,800 + 150 + 14,000 = 12,000 + + 150 + 10,000 + 4,800 – –500 – –300
June 15 + +1,250 –1,250 +00
8,450 + 3,550 + 150 + 14,000 = 12,000 + + 150 + 10,000 + 4,800 – –500 – –300
June 17 +100 –100 (d)
+ 8,450 + 3,550 + 150 + 14,000 = 12,000 + + 250 + 10,000 + 4,800 – –600 – –300
June 20 + +1,500 + 1,500 (e)
9,950 + 3,550 + 150 + +14,000 = 12,000 + + 250 + 10,000 + 6,300 – –600 – –300
June 23 –500 –500
+ 9,450 + 3,550 + 150 + 14,000 = 11,500 + +0250 + 10,000 + 6,300 – –600 – –300
June 26+ –250 +0 –250 (f)
9,200 + 3,550 + 150 + 14,000 = 11,500 + +0250 + 10,000 + 6,300 – –850 – –300
June 29 –100 –100
9,100 + 3,550 + 150 + 14,000 = 11,500 + 150 + 10,000 + 6,300 – –850 – –300
June 30 –1,000 – –1,000 (g)
$ 8,100 + $3,550 + $150 + $14,000 = $ 11,500 + $150 + $10,000 + $6,300 – $1,850 – $300
1-32 & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solution’s Manual (For Instructor$25,800
Copyright © 2013 John Wiley$25,800 Use Only)
iiqtisad.blogspot.com
PROBLEM 1-4A (Continued)
Key to Retained Earnings Column
(a) Rent expense (e) Service revenue
(b) Service revenue (f) Utilities expense
(c) Dividends (g) Salaries and wages expense
(d) Gasoline expense
Revenues
Service revenue ($4,800 + $1,500)..................... $6,300
Expenses
Salaries and wages expense ............................. $1,000
Rent expense ...................................................... 500
Utilities expense ................................................. 250
Gasoline expense............................................... 100
Total expenses............................................ 1,850
Net income ................................................................. $4,450
Assets
Equipment .................................................................. $14,000
Supplies ..................................................................... 150
Accounts receivable .................................................. 3,550
Cash............................................................................ 8,100
Total assets ........................................................ $25,800
Equity and Liabilities
Equity
Share capital—ordinary ..................................... $10,000
Retained earnings ($4,450 – $300) .................... 4,150
Total equity ................................................. $14,150
Liabilities
Notes payable ..................................................... 11,500
Accounts payable .............................................. 150
Total liabilities............................................. 11,650
Total equity and liabilities ...................................................... $25,800
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-33
iiqtisad.blogspot.com
PROBLEM 1-5A
1-34 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solution’s Manual (For Instructor Use Only)
iiqtisad.blogspot.com
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
1. +€10,000 +€10,000
+ 10,000 = 10,000
2. + –400 – € 400 (a)
+ 9,600 = 10,000 – 400
3. + –2,500 +€2,500 +
+ 7,100 + + 2,500 = 10,000 – 400
PROBLEM 1-1B
4. +000,000 +00,000 +€300 – 300 (b)
+ 7,100 + + 2,500 = + 300 + – 700
5. + –600 +€600 +00,000 +0000 +000,000
+ 6,500 + + 600 + + 2,500 = + 300 + 10,000 – 700
6. – +2,000 +€6,500 +0000 +00,000 +0000 + –€8,500 (c)
+ 8,500 + + 6,500 + + 600 + + 2,500 = + 300 + 10,000 + + 8,500 – 700
7. + –200 + 0,000 +0000 +00,000 +0000 – €200 (d)
+ 8,300 + + 6,500 + + 600 + + 2,500 = + 300 + 10,000 + + 8,500 – 700 – 200
8. + –300 + 0,000 +0000 +00,000 +–300 +000,000
+ 8,000 + + 6,500 + + 600 + + 2,500 = + 0 + 10,000 + + 8,500 – 700 – 200
9. + –2,200 + 0,000 +0000 +00,000 +0000 – 2,200 (e)
+ 5,800 + + 6,500 + + 600 + + 2,500 = 10,000 + + 8,500 – 2,900 – 200
10. – +5,700 –5,700 + + +
+€11,500 + + €800 + +€600 + +€2,500 = +€ 0 + €10,000 + +€8,500 – €2,900 – €200
€15,400 €15,400
1-35
iiqtisad.blogspot.com
PROBLEM 1-1B (Continued)
1-36 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
PROBLEM 1-2B
5,700 + 5,000 + 500 + 5,000 = 1,500 + 6,000 + 800 + 7,900
4. –400 00,000 0000 +1,000 +600 000,000
5,300 + 5,000 + 500 + 6,000 = 2,100 + 6,000 + 800 + 7,900
5. –4,250
–$3,000
00,000 0000 00,000 00,000
–900
1,050 + 5,000 + 500 + 6,000 = 2,100 + 6,000 + 800 + 7,900 –
–350
6. –450 00,000 0000 00,000 00,000 –$450
4,250
600 + 5,000 + 500 + 6,000 = 2,100 + 6,000 + 800 + 7,900 – 450
7. +2,000 00,000 0000 00,000 +$2,000 00,000 000,000
4,250
2,600 + 5,000 + 500 + 6,000 = + 2,000 + 2,100 + 6,000 + 800 + 7,900 – – 450
8. +210 +
4,250
$2,600 + $5,000 + $500 + $6,000 = +$2,000 + $2,310 $6,000 + $ 800 + $7,900 – – $450
–210
$4.460
–
$14,100 $14,100
Revenues
Service revenue ............................................. $7,900
Expenses
Salaries and wages expense ........................ $3,000
Rent expense ................................................. 900
Advertising expense ..................................... 350
Utilities expense ............................................ 210
Total expenses ....................................... 4,460
Net income ............................................................ $3,440
1-38 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
PROBLEM 1-2B (Continued)
Assets
Equipment ................................................................. $ 6,000
Supplies .................................................................... 500
Accounts receivable ................................................. 5,000
Cash........................................................................... 2,600
Total assets ....................................................... $14,100
Liabilities
Notes payable .................................................... 2,000
Accounts payable ............................................. 2,310
Total liabilities............................................ 4,310
Total equity and liabilities ......................................... $14,100
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-39
iiqtisad.blogspot.com
PROBLEM 1-3B
Revenues
Service revenue ........................................... ¥5,500
Expenses
Rent expense ............................................... ¥1,600
Gasoline expense ........................................ 600
Advertising expense ................................... 500
Utilities expense .......................................... 300
Total expenses ..................................... 3,000
Net income .......................................................... ¥2,500
Assets
Equipment ............................................................................... ¥25,000
Supplies ................................................................................... 2,000
Accounts receivable ............................................................... 4,000
Cash ......................................................................................... 10,000
Total assets ..................................................................... ¥41,000
1-40 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
PROBLEM 1-3B (Continued)
Revenues
Service revenue (¥5,500 + ¥800) ................. ¥6,300
Expenses
Rent expense ................................................ ¥1,600
Gasoline expense (¥600 + ¥100) ................. 700
Advertising expense .................................... 500
Utilities expense ........................................... 300
Total expenses...................................... 3,100
Net income ........................................................... ¥3,200
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-41
iiqtisad.blogspot.com
1-42
PROBLEM 1-4B
+ 7,150 + 500 = 500 + 8,000 – 850
May 9 +3,000 +050 + +$3,000 (c)
10,150 + 500 = 500 + 8,000 + 3,000 – 850
May 12 –700 –$700 (d)
9,450 + 500 = 500 + 8,000 + 3,000 – 850 – 700
May 15 +$3,300 +3,300 (e)
9,450 + 3,300 + 500 = 500 + 8,000 + 6,300 – 850 – 700
May 17 –2,100 – –2,100 (f)
7,350 + 3,300 + 500 = 500 + 8,000 + 6,300 – 2,950 – 700
May 20 –500 + –500
6,850 + 3,300 + 500 = –0– + 8,000 + 6,300 – 2,950 – 700
May 23 +2,000 –2,000 +
+ 8,850 + 1,300 + 500 = + –0– + 8,000 + 6,300 – 2,950 – 700
May 26 +5,000 +$5,000
13,850 + 1,300 + 500 = 5,000 –0– + 8,000 + 6,300 – 2,950 – 700
May 29 +$2,300 +2,300
13,850 + 1,300 + 500 + 2,300 = 5,000 2,300 + 8,000 + 6,300 – 2,950 – 700
May 30 –150 –150 (g)
$13,700 + $ 1,300 + $500 + $2,300 = $5,000 + $2,300 + $8,000 + $6,300 – $3,100 – $700
$17,800 $17,800
1-42 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
PROBLEM 1-4B (Continued)
Key to Retained Earnings Column
(a) Rent Expense (e) Service Revenue
(b) Advertising Expense (f) Salaries and Wages Expense
(c) Service Revenue (g) Utilities Expense
(d) Dividends
Revenues
Service revenue ($3,000 + $3,300)................ $6,300
Expenses
Salaries and wages expense ........................ $2,100
Rent expense ................................................. 800
Utilities expense ............................................ 150
Advertising expense ..................................... 50
Total expenses....................................... 3,100
Net income ............................................................ $3,200
Assets
Equipment ................................................................... $ 2,300
Supplies ...................................................................... 500
Accounts receivable ................................................... 1,300
Cash............................................................................. 13,700
Total assets ......................................................... $17,800
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-43
iiqtisad.blogspot.com
PROBLEM 1-5B
1-44 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
(b) Yes, Natalie will need accounting information to help her operate her
business. She will need information on her cash balance on a daily or
weekly basis to help her determine if she can pay her bills. She will
need to know the cost of her services so she can establish her prices.
She will need to know revenue and expenses so she can report her net
income for personal income tax purposes, on an annual basis. If she
borrows money, she will need financial statements so lenders can
assess the liquidity, solvency, and profitability of the business. Natalie
would also find financial statements useful to better understand her
business and identify any financial issues as early as possible.
Monthly financial statements would be best because they are more
timely, but they are also more work to prepare.
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-45
iiqtisad.blogspot.com
CCC1 (Continued)
(d) Natalie should have a separate bank account. This will make it easier
to prepare financial statements for her business. The business is a
separate entity from Natalie and must be accounted for separately.
1-46 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
BYP 1-1 FINANCIAL REPORTING PROBLEM
(c) Samsung had trade and other payables totaling W 16,049,800 million on
December 31, 2010 and W 13,542,626 million on December 31, 2009.
(d) Samsung reports revenues for 2009 of W 136,323,670 million and for
2010 of W 154,630,328 million.
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-47
iiqtisad.blogspot.com
BYP 1-2 COMPARATIVE ANALYSIS PROBLEM
1-48 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
BYP 1-3 REAL–WORLD FOCUS
(a) The field is normally divided into three broad areas: auditing, financial/
tax, and management accounting.
Financial Management
Auditing and Tax Accounting
People skills Medium Medium Medium
Sales skills Medium Medium Low
Communication skills Medium Medium High
Analytical skills High Very High High
Ability to synthesize Medium Low High
Creative ability Low Medium Medium
Initiative Medium Medium Medium
Computer skills High High Very High
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-49
iiqtisad.blogspot.com
BYP 1-3 (Continued)
Tax: Tax accountants prepare corporate and personal income tax state-
ments and formulate tax strategies involving issues such as financial
choice, how to best treat a merger or acquisition, deferral of taxes,
when to expense items and the like. This work requires a thorough
understanding of economics and the tax code. Increasingly, large corpo-
rations are looking for persons with both an accounting and a legal
background in tax. A person, for example, with a JD and a CPA would
be especially desirable to many firms.
1-50 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
BYP 1-4 DECISION–MAKING ACROSS THE ORGANIZATION
(a) The estimate of the $4,900 loss was based on the difference between
the $20,000 invested in the driving range and the bank balance of
$15,100 at March 31. This is not a valid basis for determining income
because it only shows the change in cash between two points in time.
Assets
Building ....................................................................... $ 6,000
Equipment ................................................................... 800
Cash............................................................................. 15,100
Total assets ......................................................... $21,900
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-51
iiqtisad.blogspot.com
BYP 1-4 (Continued)
(c) Actual net income for March can be determined by adding dividends
to the change in equity during the month as shown below:
1-52 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
BYP 1-5 COMMUNICATION ACTIVITY
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-53
iiqtisad.blogspot.com
BYP 1-5 (Continued)
LIVERPOOL COMPANY
Statement of Financial Position
December 31, 2014
Assets
Equipment ............................................................... £22,500
Supplies .................................................................. 2,000
Accounts receivable............................................... 6,000
Cash ........................................................................ 9,000
Total assets ....................................................... £39,500
1-54 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
BYP 1-6 ETHICS CASE
(a) The students should identify all of the stakeholders in the case; that is,
all the parties that are affected, either beneficially or negatively, by the
action or decision described in the case. The list of stakeholders in this
case are:
(b) The students should identify the ethical issues, dilemmas, or other con-
siderations pertinent to the situation described in the case. In this case
the ethical issues are:
Is it proper that Jeff charged both firms for the total travel costs
rather than split the actual amount of $296 between the two firms?
Is collecting $592 as reimbursement for total costs of $296 ethical
behavior?
Did Jeff deceive both firms or neither firm?
(c) Each student must answer the question for himself/herself. Would you
want to start your first job having deceived your employer before your
first day of work? Would you be embarrassed if either firm found out
that you double-charged? Would your school be embarrassed if your
act was uncovered? Would you be proud to tell your professor that
you collected your expenses twice?
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-55
iiqtisad.blogspot.com
GAAP EXERCISES
GAAP 1-1
GAAP 1-2
GAAP 1-3
GAAP 1-4
1-56 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)
iiqtisad.blogspot.com
GAAP 1-5
* (Amounts in thousands)
(a) Tootsie Roll’s total assets at December 31, 2010 were $ 860,383; and
at December 31, 2009 were $ 838,247.
(b) Tootsie Roll had $ 115,976 in cash and cash equivalents at December
31, 2010.
(c) Tootsie Roll had $ 9,791 in accounts payable at December 31, 2010;
and $9,140 at December 31, 2009.
(d) Total revenue in 2010 was $521,448; and $499,331 in 2009 for Tootsie
Roll.
(e) The amount of change in Tootsie Roll’s net income between 2009 and
2010 was ($164).
Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only) 1-57
iiqtisad.blogspot.com
1-58 Copyright © 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)