西方财务会计.doc

Chapter 11Chapter 211Chapter 320Chapter 425Chapter 536Chapter 643Chapter 752Chapter 856Chapter 1061Chapter 1167Chapter 1273Chapter 1379Chapter 1488Chapter 1594Chapter 11.Give the major disadvantage of disregarding the cost concept and constantly revaluing assets based on appraisals and opinions.ANS:Accounting reports would become unstable and unreliable.2.Determine the missing amount for each of the following:AssetsLiabilitiesOwners Equity(a)$18,000$ 11,000$50,000(b)$ 28,000$35,000$ 7,000(c)ANS:(a)$29,000(b)$22,000(c)$28,0003.Indicate whether each of the following represents an asset, liability, or owners equity:(a)accounts payable(b)wages expense(c)capital(d)accounts receivable(e)withdrawal(f)landANS:(a) liability(b) owners equity(c) owners equity(d) asset(e) owners equity(f) asset4.Selected transactions completed by a proprietorship are described below. Indicate the effects of each transaction on assets, liabilities, and owners equity by inserting + for increase and - for decrease in the appropriate columns at the right. If appropriate, you may insert more than one symbol in a column.ALOE(a)Received cash from owner as an additional investment_(b)Purchased supplies on account_(c)Paid rent for the current month_(d)Received cash for services sold to customers_(e)Returned some defective supplies purchased in (b)_(f)Paid insurance premiums in advance_(g)Paid cash to creditor for purchases in (b)_(h)Charged customers for services sold on account_(i)Paid cash to a customer as a refund for an overcharge_(j)Received cash on account from customers_(k)Owner withdrew cash for personal use_(l)Recorded the cost of supplies used during the year_(m)Received invoice for electricity used_(n)Paid wages_(o)Purchased a truck for cash_ANS:ALOE(a)+(b)+(c)-(d)+(e)-(f)+,-(g)-(h)+(i)-(j)+,-(k)-(l)-(m)+-(n)-(o)+,-5.Identify each of the following as an (1) increase in owners equity, or a (2) decrease in owners equity(a)Fees Earned(b)Wages Expense(c)Withdrawal(d)Lawn Care Revenue(e)Investment(f)Supplies ExpenseANS:(a)1(b)2(c)2(d)1(e)1(f)26.From the following list of accounts taken from Bensons accounting records, identify those that would appear on the Income Statement.(a)Rent Expense(b)Land(c)Capital(d)Fees Earned(e)Withdrawal(f)Wages Expense(g)InvestmentANS:(a), (d), (f)7.Identify which of the following accounts appear on a balance sheet.(a)Cash(b)Fees Earned(c)Joe Brown, Capital(d)Wages Payable(e)Rent Expense(f)Prepaid Advertising(g)LandANS:(a), (c), (d), (f), (g)8.Indicate whether each of the following activities would be reported on the Statement of Cash Flows as an Operating Activity, an Investing Activity, a Financing Activity, or does not appear on the Cash Flow Statement.(a)Cash paid for building(b)Cash paid to suppliers(c)Cash paid for owners withdrawal(d)Cash received from customers(e)Cash received from the owners investment(f)Cash received from the sale of a building(g)Borrowed cash from a bankANS:(a)Investing(b)Operating(c)Financing(d)Operating(e)Financing(f)Investing(g)Financing9.For each of the following, determine the amount of net income or net loss for the year.(a)Revenues for the year totaled $90,500 and expenses totaled $44,500. The owner made an additional investment of $15,000 during the year.(b)Revenues for the year totaled $75,500 and expenses totaled $110,500. The owner withdrew $20,000 during the year.(c)Revenues for the year totaled $198,000 and expenses totaled $85,000. The owner invested an additional $20,000 and withdrew $15,000 during the year.(d)Revenues for Smith Co. totaled $273,500 and expenses totaled $263,800. Cash withdrawals of $30,000 were paid during the year.ANS:(a)$46,000 net income ($90,500 - $44,500)(b)$35,000 net loss ($75,500 - $110,500)(c)$113,000 net income ($198,000 - $85,000)(d)$9,700 net income ($273,500 - $263,800)10.The total assets and total liabilities of Missys Draperies, a proprietorship, at the beginning and at the end of the current fiscal year are as follows:January 1December 31Total assets$250,000$430,000Total liabilities 200,000 140,000(a)Determine the amount of net income earned during the year. The owner did not invest any additional assets in the business during the year and made no withdrawals.(b)Determine the amount of net income during the year. The assets and liabilities at the beginning and at the end of the year are unchanged from the amounts presented above. However, the owner withdrew $32,000 in cash during the year (no additional investments).(c)Determine the amount of net income earned during the year. The assets and liabilities at the beginning and at the end of the year are unchanged from the amounts presented above. However, the owner invested an additional $40,000 in cash in the business in June of the current fiscal year (no withdrawals).(d)Determine the amount of net income earned during the year. The assets and liabilities at the beginning and at the end of the year are unchanged from the amounts presented above. However, the owner invested an additional $10,000 in cash in August of the current fiscal year and made twelve monthly cash withdrawals of $3,000 each during the year.ANS:(a)Owners equity at end of year$290,000Owners equity at beginning of year 50,000Net income$240,000=(b)Increase in owners equity as in (a)$240,000Add withdrawals 32,000Net income$272,000= =(c)Increase in owners equity as in (a)$240,000Deduct additional investment 40,000Net income$200,000= =(d)Increase in owners equity as in (a)$240,000Add withdrawals 36,000$276,000Deduct additional investment 10,000Net income$266,000=11.Selected transaction data of a business for June are summarized below. Determine the following amounts for June: (a) total revenue, (b) total expense, (c) net income.Service sales charged to customers on account during June$35,000Cash received from cash customers for services performed in June30,000Cash received from customers on account during June: Services performed and charged to customers prior to June15,000 Services performed and charged to customers during June20,000Expenses incurred prior to June and paid during June8,250Expenses incurred and paid in June38,500Expenses incurred in June but not paid in June7,000Expenses for supplies used and insurance (not included above) applicable to June1,000(a)$65,000 ($35,000 + $30,000)(b)$46,500 ($38,500 + $7,000 + $1,000)(c)$18,500 ($65,000 - $46,500)12.On May 1, 2005, the amount of Beth Moores capital in Moore Services Company was $101,000. During May, she withdrew $15,100 from the business. The amounts of the various assets, liabilities, revenues, and expenses are as follows:Accounts payable$8,900Accounts receivable25,950Cash11,390Fees earned70,800Insurance expense1,475Land74,400Miscellaneous expense1,510Prepaid insurance2,000Rent expense8,000Salary expense35,300Supplies950Supplies expense825Utilities expense3,800Present in good form (a) an income statement for May, (b) a statement of owners equity for May, and (c) a balance sheet as of May 31.Moore Services CompanyIncome StatementFor the Month Ended May 31, 2005Fees earned$70,800Operating expenses: Salary expense$35,300 Rent expense8,000 Utilities expense3,800 Supplies expense825 Insurance expense1,475 Miscellaneous expense 1,510Total operating expenses 50,910Net income$19,890=(b)Moore Services CompanyStatement of Owners EquityFor the Month Ended May 31, 2005Beth Moore, capital, May 1, 2005$101,000Net income for the month$19,890Less withdrawals 15,100Increase in owners equity 4,790Beth Moore, capital, May 31, 2005$105,790=(c)Moore Services CompanyBalance SheetMay 31, 2005AssetsLiabilitiesCash$ 11,390Accounts payable$ 8,900Accounts receivable 25,950Prepaid insurance 2,000Owners EquitySupplies 950Beth Moore, capital 105,790Land 74,400Total liabilities andTotal assets$114,690owners equity$114,690=13.Ross Consultants began operations on December 1, 2005. The financial statements for Ross Consultants are shown below for the month ended December 31, 2005 (the first month of operations). Determine the missing amounts for letters (a) through (o).Ross ConsultantsIncome StatementFor the Month Ended December 31, 2062Fees earned$20,000Operating expenses: Wages expense$6,250 Rent expense(a) Supplies expense1,600 Utilities expense900 Miscellaneous expense 1,550Total operating expenses (b)Net income$ (c)=Ross ConsultantsStatement of Owners EquityFor the Month Ended December 31, 2005Joe Ross, capital, December 1, 20050Investment on December 1, 2005$30,000Net income for December (d)$ (e)Less withdrawals 4,000Increase in owners equity (f)Joe Ross, capital, December 31, 2005$32,100=Ross ConsultantsBalance SheetDecember 31, 2005AssetsLiabilitiesCash$ (g)Accounts payable$ (i)Supplies 1,100Owners EquityLand (h)Joe Ross, capital (j)Total assets$45,900Total liabilities and=owners equity$ (k)=Ross ConsultantsStatement of Cash FlowsFor the Month Ended December 31, 2005Cash flows from operating activities: Cash received from customers$20,000 Deduct cash payments for expenses and payments to creditors 1,200Net cash flow from operating activities$ 18,800Cash flows from investing activities: Cash payments for acquisition of land(20,000)Cash flows from financing activities: Cash received as owners investment$ (l) Deduct cash withdrawal by owner (m)Net cash flow from financing activities (n)Net cash flow and Dec. 31, 2005 cash balance$ (o)=Place your answers in the space provided below. Hint: Use the interrelationships among the financial statements to solve this problem.ANS:a.$ 3,600b.$13,900c.$ 6,100d.$ 6,100e.$36,100f.$32,100g.$24,800h.$20,000i.$13,800j.$32,100k.$45,900l.$30,000m.$ 4,000n.$26,000o.$24,80014.Jay Pyle, CPA, was organized on January 1, 2005, as a proprietorship. List the errors that you find in the following financial statements and prepare the corrected statements for the three months ended March 31, 2005.Jay Pyle, CPAIncome StatementFor the Three Months Ended March 31, 2005Fees earned$40,000Operating expenses: Salary expense$7,735 Rent expense3,200 Wages expense1,950 Utilities expense1,225 Miscellaneous expense2,000 Answering service expense550 Supplies expense 2,000Total operating expenses 29,000Net income$11,000=Jay Pyle CPAStatement of Owners EquityMarch 31, 2005Jay Pyle, capital, January, 1, 2005$ 0Investment on January 1, 2005$20,000Net income for the 3 months 11,00031,000Less withdrawals 5,000Increase in owners equity 36,000Jay Pyle, capital, March 31, 2005.$36,000=Balance SheetFor the Three Months Ended March 31, 2005AssetsOwners EquityLand$10,000Jay Pyle, capital$36,000Cash 15,860LiabilitiesAccounts payable 2,670Accounts receivable 12,225Supplies 925 Total liabilities andTotal assets$48,125owners equity48,125=ANS:Errors in the Jay Pyle, CPA, financial statements include the following:(1)Miscellaneous expense is incorrectly listed after utilities expense in the income statement. Miscellaneous expense should be listed as the last expense, regardless of the amount.(2)The operating expenses are incorrectly added. Instead of $29,000, the total should be $18,660.(3)Because operating expenses are incorrectly added, the net income is incorrect. It should be listed as $21,340.(4)The statement of owners equity should be for a period of time instead of a specific date. That is, the statement of owners equity should be reported For the Three Months Ended March 31, 2005.(5)The amount of the owners equity is incorrect. It should be $36,340.(6)The name of the company is missing from the balance sheet heading.(7)The balance sheet should be as of March 31, 2005, not For the Three Months Ended March 31, 2005.(8)Cash, not Land, should be the first asset listed in the balance sheet.(9)Accounts Payable is incorrectly listed as an asset in the balance sheet. Accounts Payable should be listed as a liability.(10)Liabilities should be listed in the balance sheet ahead of owners equity.(11)Accounts Receivable is incorrectly listed as a liability in the balance sheet. Accounts Receivable should be listed as an asset.(12)The total assets and the total liabilities do not foot.Correctly prepared financial statements for Jay Pyle, CPA, are shown below.Jay Pyle, CPAIncome StatementFor the Three Months Ended March 31, 2005Fees earned$40,000Operating expenses: Salary expense$7,735 Rent expense3,200 Wages expense1,950 Utilities expense1,225 Answering service expense550 Supplies expense2,000 Miscellaneous expense 2,000Total operating expenses 18,660Net income$21,340=Jay Pyle, CPAStatement of Owners EquityFor the Three Months Ended March 31, 2005Jay Pyle, capital, January, 1, 2005$ 0Investment on January 1, 2005$20,000Net income for three months 21,340$41,340Less withdrawals 5,000Increase in owners equity36,340Jay Pyle, capital, March 31, 2005$36,340=Jay Pyle, CPABalance SheetMarch 31, 2005AssetsLiabilitiesCash$15,860Accounts payable$ 2,670Accounts receivable 12,225Owners EquitySupplies 925Jay Pyle, capital 36,340Land 10,000Total liabilities andTotal assets$39,010owners equity$39,010=15.Based on the Bell Company account balances, calculate the liabilities to equity ratio. Please show all calculations.Account AmountCash$200Accounts receivable300Supplies100Accounts payable100Wages payable200Bell, capital300ANS:(Accounts Payable + Wages Payable) Bell, Capital( 100 + 200 ) 300 = 1Chapter 21.Organize the following accounts into the usual sequence of a chart of accounts. Miscellaneous Expense Accounts Payable Accounts Receivable Cash Gordon Wells, Capital Fees Earned Prepaid Rent Salaries Expense Unearned Revenue Gordon Wells, DrawingANS:CashAccounts ReceivablePrepaid RentAccounts PayableUnearned RevenueGordon Wells, CapitalGordon Wells, DrawingFees EarnedSalaries ExpenseMiscellaneous Expense2.Selected accounts from the ledger of Hughes Company appear below. For each account, indicate the following:(a)In the first column at the right, indicate the nature of each account, using the following abbreviations:Asset - ARevenue - RLiability - LExpense - ENone of the above - N(b)In the second column, indicate the increase side of each account by inserting Dr. or Cr.Type ofIncreaseAccountAccountSide(1)Supplies_(2)Notes Receivable_(3)Fees Earned_(4Phillips, Drawing_(5)Accounts Payable_(6)Salaries Expense_(7)Hughes Capital_(8)Accounts Receivable_(9)Equipment_(10)Notes Payable_ANS:Type ofIncreaseAccountAccountSide(1)ADr.(2)ADr.(3)RCr.(4)NDr.(5)LCr.(6)EDr.(7)NCr.(8)ADr.(9)ADr.(10)LCr.3.Calculate the following:(a)Determine the cash receipts for June based on the following data:Cash payments during May$42,500Cash account balance, May 13,750Cash account balance, May 307,000(b)Determine the cash received from customers on account during June based on the following data:Accounts receivable account balance, May 1$11,500Accounts receivable account balance, May 308,250Fees bille