Questions and Answers of Fundamental Managerial Accounting Concepts 10th

Understanding Credits Below is a list of accounts. For each account, indicate whether a credit increases or decreases the account balance. Account 0. Cash 1. Accounts Receivable 2. Capital Stock 3.
Understanding Debits, Credits, and Retained Earnings Below is a list of accounts and whether the account is being debited or credited. For each item, indicate whether the account balance will be
Understanding Retained Earnings Below is a list of accounts with corresponding balances. Using these accounts, along with the fact that the beginning balance in Retained Earnings is $9,000, compute
Journal Entries Refer to PE 3-1. Make the journal entry necessary to record the transaction.
Journal Entries Refer to PE 3-2. Make the journal entry necessary to record the transaction.
Journal Entries Refer to PE 3-3. Make the journal entry necessary to record the transaction.
Journal Entries Refer to PE 3-4. Make the journal entry necessary to record the transaction.
Journal Entries Refer to PE 3-5. Make the journal entry necessary to record the transaction.
Journal Entries with Revenues, Expenses, and Dividends Make the journal entries necessary to record the following eight transactions.a. Purchased inventory on account for $130,000.b. Sold goods for
Posting Refer to the journal entries made in PE 3-11 through PE 3-15. Construct a T-account representing each account impacted by those five transactions. Post all of the journal entries to these
Posting with Revenues, Expenses, and Dividends Refer to the journal entries made in PE 3-16. Construct a T-account representing each account impacted by those eight transactions. Post all of the
Preparing a Trial Balance Refer to the T-accounts constructed in PE 3-17 and PE 3-18. Using the ending balances in those T-accounts, construct a trial balance. Note: The only account that is common
Using a Trial Balance to Prepare an Income Statement Using the trial balance given below, prepare an income statement. Cash... Accounts Receivable Inventory Land Building Accounts Payable Loan
Using a Trial Balance to Prepare a Balance Sheet Using the trial balance given in PE 3-20, prepare a balance sheet. Note: The ending retained earnings balance is equal to the beginning balance (which
Preparing a Statement of Cash Flows Refer to the transactions described in PE 3-1 through PE 3-5 as well as to the eight transactions in PE 3-16. Using all of these transactions, prepare a statement
Basic Accounting Equation The fundamental accounting equation can be applied to your personal finances. For each of the following transactions, show how the accounting equation would be kept in
Accounting Elements: Increase/Decrease, Debit/Credit Relationships The text describes the following accounting elements: assets, liabilities, owners’ equity, capital stock, retained earnings,
Expanded Accounting Equation Payless Department Store had the following transactions during the year:1. Purchased inventory on account.2. Sold merchandise for cash, assuming a profit on the sale.3.
Classification of Accounts For each of the accounts listed, indicate whether it is an asset (A), a liability (L), or an owners’ equity (OE) account. If it is an account that affects owners’
Normal Account Balances For each account listed in E 3-26, indicate whether it would normally have a debit (DR) balance or a credit (CR) balance.
Relationships of the Expanded Accounting Equation Skibbe, Inc., had the following information reported. From these data, determine the amount of:1. Capital stock at December 31, 2008.2. Retained
Journalizing Transactions Record each of the following transactions in Raintree’s general journal. (Omit explanations.)1. Issued capital stock for $90,000 cash.2. Borrowed $45,000 from a bank.
Journalizing Transactions Silva Company had the following transactions:1. Purchased a new building, paying $20,000 cash and issuing a note for $50,000.2. Purchased $15,000 of inventory on account.3.
Journal Entries During July 2009, Krogue, Inc., completed the following transactions. Prepare the journal entry for each transaction.July 2 Received $320,000 for 80,000 shares of capital stock.4
Challenging Journal Entries The accountant for Han Company is considering how to journalize the following transactions:a. The employees of Han Company earned $105,000. The employees received $90,000
Analysis of Journal Entries The following journal entries are from the books of Kara Elizabeth Company:For each of the journal entries, prepare an explanation of the business event that is being
Journal Entry to Correct an Error Legolas Company paid $5,000 cash for executive salaries. When the journal entry to record this $5,000 payment was made, the payment was mistakenly added to the cost
Journalizing and Posting Transactions Given the following T-accounts, describe the transaction that took place on each specified date during July: Cash Accounts Receivable Inventory 7/5 9,500 7/1
Posting Journal Entries Post the journal entries prepared in E 3-31 to T-accounts, and determine the final balance for each account. (Assume all beginning account balances are zero.)
Trial Balance The account balances from the ledger of Arigato, Inc., as of July 31, 2009, are listed here in alphabetical order. The balance for Retained Earnings has been omitted. Prepare a trial
Trial Balance Assume you work in the accounting department at Marshall, Inc. Your boss has asked you to prepare a trial balance as of November 30, 2009, using the following account balances from the
Transaction Analysis and Journal Entries Browne Motors, Inc., entered into the following transactions during the month of June:a. Purchased a total of eight new cars and trucks from Jerry’s Motors,
Journal Entries and Trial Balance As of January 1, 2009, Gammon Corporation had the following balances in its general ledger:Gammon had the following transactions during 2009. All expenses were paid
Journalizing and Posting Assume you are interviewing for a part-time accounting job at Spilker & Associates, Inc., and the interviewer gives you the following list of company transactions in
Journal Entries from Ledger Analysis T-accounts for JCB Industries, Inc., are shown belowRequired:1. Analyze these accounts and detail the appropriate journal entries that must have been made by JCB
Journalizing and Posting Transactions Anna Regina, owner of Anna’s Beauty Supply, completed the following business transactions during March 2009.Mar. 1 Purchased $26,500 of inventory on credit.4
Unifying Concepts: Compound Journal Entries, Posting, Trial Balance Shaw Mercantile Company had the following transactions during 2009.a. Jon Shaw began business by investing the following assets,
Unifying Concepts: Journal Entries, T-Accounts, Trial Balance Jethro Company, a retailer, had the following account balances as of April 30, 2009:During May, the company completed the following
Unifying Concepts: First Steps in the Accounting Cycle The following balances were taken from the general ledger of Holland Company on January 1, 2009:During 2009, the company completed the following
Unifying Concepts: T-Accounts, Trial Balance, and Income Statement The following list is a selection of transactions from Trafalga, Inc.’s business activities during 2009, the first year of
Correcting a Trial Balance The following trial balance was prepared by a new employee.Required:Prepare the corrected company trial balance. (Assume all accounts have “normal” balances and the
How Does Wal-Mart (and Other Companies) Do It?Wal-Mart’s revenues exceeded $312 billion in 2005. These revenues were generated by millions of transactions all over the world: in the United States,
Advantages and Disadvantages of a Computerized Accounting System Your soon-to-be father-in-law owns a small retail store. He has manually kept his business accounting records for over 20 years, but
When Is a Debit a Debit?Your new roommate, Susan, is confused. She has just received a notice from her bank indicating that her account has been debited for the cost of new checks. This has reduced
Understanding the Mechanics of Accounting As the CFO (chief financial officer) of Rollins Engineering Company, you are looking for someone to fill the position of office manager. Part of the job
Exercising Accounting Judgment You have recently started business as an accounting consultant. Companies come to you when they face difficult decisions about how to make certain journal entries. You
You Decide: Is understanding the accounting cycle essential to being a good accountant, or is it a waste of time?John, a family friend who didn’t go to college, was talking to you about his job, as
You Decide: If you major in accounting, will you enjoy a rewarding career, or will the field be extinct in 20 years?I thought an accounting degree would give me the solid, fundamental understanding
McDonald’s A brief history of the origin of the McDonald’s Corporation is given at the start of this chapter. The following questions are adapted from information appearing in McDonald’s 2005
Shanghai Petrochemical Company Limited In July 1993, Shanghai Petrochemical Company Limited became the first company organized under the laws of the People’s Republic of China to publicly issue its
Should You Go the Extra Mile?You work in a small convenience store. The store is very low-tech; you ring up the sales on an old-style cash register that merely records the amount of the sale. The
Accounting Is Everywhere!Financial accounting information is frequently used in newspaper and magazine articles to provide background data on companies. Prepare a one-page report on the use of
Analyzing Transactions This spreadsheet assignment is a continuation of the spreadsheet assignment given in Chapter 2. If you completed that spreadsheet, you have a head start on this one.Determine
To Lend or Not To Lend—That Is the Question Sam Love is vice president and chief lending officer of the Meeker First National Bank.Recently, Bill McCarthy, a new farmer, moved to town. Sam has not
Information Needs to Remain Competitive In 2005, Intel owned the microprocessor industry with a market share of over 80%. Its nearest competition was Advanced Micro Devices (AMD) with a market share
International Happenings July 1, 1997, marked a historic date as Hong Kong reverted to political and economic control by mainland China. The Stock Exchange of Hong Kong offers the opportunity to
Is Better Accounting the Solution to All of Life’s Problems?Your friend has just completed an introductory accounting course. She has heard that you are now taking accounting, and she has come to
We Don’t Have Time for Good Accounting!Your sister and her business partner have just launched their own software company. They have developed software that compresses and packages email text and
Is the Proposed Electricity Rate Increase Fair?The governor of your state has just appointed you to the state’s public utility rate commission.Your job is to set fair prices for the electricity and
You Decide: How much education is necessary for an accountant?You are at your family reunion when some relatives start asking you about your studies and plans after school. Upon learning your
Wal-Mart In Appendix A at the back of this text is Wal-Mart’s Form 10-K for the year ended January 31, 2006. Review the Form 10-K and identify its major areas. How many pages of the Form 10-K are
General Motors Below is a condensed listing of the assets and liabilities of General Motors as of December 31, 2005. All amounts are in millions of U.S. dollars.1. Among its assets, General Motors
Should the SEC Choose the FASB or the IASB?The SEC has received from Congress the legal authority to set accounting standards in the United States. Historically, the SEC has allowed the FASB to set
Disagreement with the Boss You recently graduated with your degree in accounting and have accepted an entry-level accounting position with BigTec, Inc. One of your first responsibilities is to review
The Language of Business Accounting is known as the “language of business.” Prepare a one- to two-page paper explaining why all business students should have some accounting education. Also
Visiting an Accounting Professional Select a field of accounting you are interested in. Visit a professional who works in that area and discuss the career opportunities available in that specific
Total Assets Using the following information, compute total assets. Equipment.... Accounts payable Capital stock. Cash..... $10,000 900 1,500 800 Loan payable... 9,000 Wages payable 500 Accounts
Total Liabilities Refer to the data in PE 2-1. Compute total liabilities.
Total Owners’ Equity Refer to the data in PE 2-1. Compute total owners’ equity.
The Accounting Equation For the following four cases, use the accounting equation to compute the missing quantity Case A Case B Assets $10,000 8,000 Case C C Case D 13,000 Liabilities $ 4,000 B 5,500
Balance Sheet Using the data in PE 2-1, prepare a balance sheet.
Current Assets Using the following information, compute total current assets. Land.... $7,000 Machinery 1,300 Accounts payable 1,600 Cash.. 625 Buildings 7,500 Accounts receivable 800 Retained
Current Liabilities Using the following information, compute total current liabilities. Inventory. Loan payable (due in 14 months) Capital stock Cash Mortgage payable (due in 30 years) Loan payable
Book Value and Market Value of Equity For the following four cases, compute (1) the book value of equity and (2) the market value of equity. Assets Liabilities of Stock Outstanding Case A Case B $
Total Revenues Using the following information, compute total revenues. Caution: Not all of the items listed should be included in the computation of total revenues. Cost of goods sold $10,200
Total Expenses Using the data in PE 2-9, compute total expenses. Caution: Not all of the items listed should be included in the computation of total expenses.
Computation of Net Income For the following four cases, compute net income (or net loss). Caution: Not all of the items listed should be included in the computation of net income. Case A Case B Case
Income Statement Using the following information, prepare an income statement. Cost of goods sold $ 7,300 Interest expense 1,200 Wage expense Cash. 900 600 Sales 12,000 Accounts payable 400 Accounts
Computation of Ending Retained Earnings For the following four cases, compute the ending amount of retained earnings. Caution: Not all of the items listed should be included in the computation of
Expanded Accounting Equation For the following four cases, use the expanded accounting equation to compute the missing quantity. Assets Liabilities Capital Stock Retained Earnings Case A Case B
Computing Cash from Operating Activities Using the following data, compute cash flow from operating activities. Cash Inflow (Outflow) a. Cash received from sale of a building. b. Cash paid for
Computing Cash from Investing Activities Refer to the information in PE 2-15. Use that information to compute cash flow from investing activities.
Computing Cash from Financing Activities Refer to the information in PE 2-15. Use that information to compute cash flow from financing activities
Preparing a Statement of Cash Flows Refer to the information in PE 2-15. Use that information to prepare a complete statement of cash flows. The beginning cash balance for the year was $2,000.
Financial Statement Articulation For the following four cases, use the principle of financial statement articulation to compute the missing amounts Case A Dividends $ 6,500 $ 7,300 Cash, beginning
Classification of Financial Statement Elements Indicate for each of the following items whether it would appear on a balance sheet (BS) or an income statement (IS). If a balance sheet item, is it an
Accounting Equation Compute the missing amounts for companies A, B, and C. A B C $ 8,400 $13,000 13,000 16,500 95,000 ? 67,000 ? 16,000 23,000 80,000 31,000 41,500 45,000 17,000 ? Cash Accounts
Comprehensive Accounting Equation Assuming no additional investments by or distributions to owners, compute the missing amounts for companies X, Y, and Z. X Y Z Assets: January 1, 2009 Liabilities:
Computing Elements of Owners’ Equity From the information provided, determine:1. The amount of retained earnings at December 31.2. The amount of revenues for the periodAdditional data:Expenses for
Balance Sheet Relationships Correct the following balance sheet Canfield Corporation Balance Sheet December 31, 2009 Liabilities and Owners' Equity Assets Cash Accounts payable $ 55,000 Buildings
Balance Sheet Preparation From the following data, prepare a classified balance sheet for Taylorsville Construction Company at December 31, 2009. Accounts payable Accounts receivable. $ 74,300
Income Statement Computations Following are the operating data for an advertising firm for the year ended December 31, 2009.For 2009, determine:1. Income before taxes.2. Income taxes.3. Net income.4.
Income Statement Preparation The following selected information is taken from the records of Pickard and Associates.1. Prepare an income statement for the year ended December 31, 2009. (Assume that
Income and Retained Earnings Relationships Assume that retained earnings increased by $375,000 from December 31, 2008, to December 31, 2009, for Jarvie Distribution Corporation. During the year, a
Retained Earnings Computations During 2009, Edgemont Corporation had revenues of $230,000 and expenses, including income taxes, of $190,000. On December 31, 2008, Edgemont had assets of $350,000,
Preparation of Income Statement and Retained Earnings Statement Prepare an income statement and a statement of retained earnings for Big Sky Corporation for the year ended June 30, 2009, based on the
Articulation: Relationships between a Balance Sheet and an Income Statement The total assets and liabilities of Omni Company at January 1 and December 31, 2009, are presented below.Determine the
Cash Flow Computations From the following selected data, compute:1. Net cash flow provided (used) by operating activities.2. Net cash flow provided (used) by investing activities.3. Net cash flow
Cash Flow Classifications For each of the following items, indicate whether it would be classified and reported under the operating activities (OA), investing activities (IA), or financing activities
Notes to Financial Statements Refer to Wal-Mart’s Form 10-K in Appendix A at the end of the book. How important are the notes to financial statements? What are the major types of notes that

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