Test Bank Solution Manual for Accounting 28th Edition (2024) by Carl S. Warren Christine Jonick Jennifer Schneider | All Chapters 1-26 Included | Latest Complete Guide A+.

Solution Manual for Accounting 28th Edition (2024) by Carl S. Warren Christine Jonick Jennifer Schneider | All Chapters 1-26 Included | Latest Complete Guide A+. CHAPTER 1 INTRODUCTION TO ACCOUNTING AND BUSINESS DISCUSSION QUESTIONS 1. Some users of accounting information include managers, employees, investors, creditors, customers, and the government. 2. The role of accounting is to provide information for managers to use in operating the business. In addition, accounting provides information to others to use in assessing the economic performance and condition of the business. 3. The corporate form allows the company to obtain large amounts of resources by issuing stock. For this reason, most companies that require large investments in property, plant, and equipment are organized as corporations. 4. No. The business entity concept limits the recording of economic data to transactions directly affecting the activities of the business. The payment of the interest of $4,500 is a personal transaction of Josh Reilly and should not be recorded by Dispatch Delivery Service. 5. The land should be recorded at its cost of $167,500 to Reliable Repair Service. This is consistent with the cost concept. 6. a. No. The offer of $2,000,000 and the increase in the assessed value should not be recognized in the accounting records because land is recorded on the cost basis. b. Cash would increase by $2,125,000, land would decrease by $900,000, and owner’s equity would increase by $1,225,000. 7. An account receivable is a claim against a customer for goods or services sold. An account payable is an amount owed to a creditor for goods or services purchased. Therefore, an account receivable in the records of the seller is an account payable in the records of the purchaser. 8. (b) The business realized net income of $91,000 ($679,000 – $588,000). 9. (a) The business incurred a net loss of $75,000 ($640,000 – $715,000). 10. (a) Net income or net loss (b) Owner’s equity at the end of the period (c) Cash at the end of the period CHAPTER 1 INTRODUCTION TO ACCOUNTING AND BUSINESS DISCUSSION QUESTIONS 1-1 © 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 1 Introduction to Accounting and Business PE 1-1A $597,000. Under the cost concept, the land should be recorded at the cost to Boulder Repair Service. PE 1-1B $369,500. Under the cost concept, the land should be recorded at the cost to Clementine Repair Service. PE 1-2A a. A = L + OE $518,000 = $165,000 + OE OE = $353,000 b. A = L + OE +$86,200 = +$25,000 + OE OE = +$61,200 OE on December 31, 20Y9 = $353,000 + $61,200 = $414,200 PE 1-2B a. A = L + OE $382,000 = $94,000 + OE OE = $288,000 b. A = L + OE –$63,000 = +$35,000 + OE OE = –$98,000 OE on December 31, 20Y9 = $288,000 – $98,000 = $190,000 PE 1-3A (2) Asset (Accounts Receivable) increases by $22,400; Owner’s Equity (Delivery Service Fees) increases by $22,400. (3) Liability (Accounts Payable) decreases by $4,100; Asset (Cash) decreases by $4,100. (4) Asset (Cash) increases by $14,700; Asset (Accounts Receivable) decreases by $14,700. (5) Asset (Cash) decreases by $1,600; Owner’s Equity (Terry Young, Drawing) decreases by $1,600. PRACTICE EXERCISES 1-2 © 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 1 Introduction to Accounting and Business PE 1-3B (2) Owner’s Equity (Advertising Expense, increases) decreases by $6,750; Asset (Cash) decreases by $6,750. (3) Asset (Supplies) increases by $2,920; Liability (Accounts Payable) increases by $2,920. (4) Asset (Accounts Receivable) increases by $20,460; Owner’s Equity (Delivery Service Fees) increases by $20,460. (5) Asset (Cash) increases by $11,410; Asset (Accounts Receivable) decreases by $11,410. PE 1-4A Fees earned $1,870,000 Expenses: Wages expense $1,115,000 Office expense 343,000 Miscellaneous expense 21,000 Total expenses 1,479,000 Net income $ 391,000 PE 1-4B Fees earned $899,600 Expenses: Wages expense $539,800 Office expense 353,800 Miscellaneous expense 14,400 Total expenses 908,000 Net loss $ (8,400) Income Statement For the Year Ended August 31, 20Y4 Up-in-the-Air Travel Service Income Statement For the Year Ended April 30, 20Y7 Zenith Travel Service 1-3 © 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 1 Introduction to Accounting and Business PE 1-5A Jerome Foley, capital, May 1, 20Y6 $ 876,000 Additional investment by owner during year $ 52,000 Net income for the year 391,000 Withdrawals (34,000) Increase in owner’s equity 409,000 Jerome Foley, capital, April 30, 20Y7 $1,285,000 PE 1-5B Megan Cox, capital, September 1, 20Y3 $456,000 Additional investment by owner during year $ 43,200 Net loss for the year (8,400) Withdrawals (21,600) Increase in owner’s equity 13,200 Megan Cox, capital, August 31, 20Y4 $469,200 PE 1-6A Cash $ 170,000 Accounts receivable 417,000 Supplies 16,000 Land 772,000 Total assets $1,375,000 Accounts payable $ 90,000 Jerome Foley, capital 1,285,000 Total liabilities and owner’s equity $1,375,000 Owner’s Equity Liabilities Assets Up-in-the-Air Travel Service Balance Sheet April 30, 20Y7 Zenith Travel Service Statement of Owner’s Equity For the Year Ended August 31, 20Y4 Up-in-the-Air Travel Service Statement of Owner’s Equity For the Year Ended April 30, 20Y7 1-4 © 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 1 Introduction to Accounting and Business PE 1-6B Cash $ 54,500 Accounts receivable 90,600 Supplies 5,600 Land 372,000 Total assets $522,700 Accounts payable $ 53,500 Megan Cox, capital 469,200 Total liabilities and owner’s equity $522,700 PE 1-7A Cash flows from (used for) operating activities: Cash received from customers $ 1,803,000 Cash paid for operating expenses (1,479,000) Net cash flows from operating activities $ 324,000 Cash flows from (used for) investing activities: Cash paid for purchase of land (347,000) Cash flows from (used for) financing activities: Cash received from owner as investment $ 52,000 Cash withdrawals by owner (34,000) Net cash flows from financing activities 18,000 Net decrease in cash $ (5,000) Cash balance, May 1, 20Y6 175,000 Cash balance, April 30, 20Y7 $ 170,000 For the Year Ended April 30, 20Y7 Zenith Travel Service Balance Sheet August 31, 20Y4 Owner’s Equity Assets Liabilities Up-in-the-Air Travel Service Statement of Cash Flows 1-5 © 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 1 Introduction to Accounting and Business PE 1-7B Cash flows from (used for) operating activities: Cash received from customers Cash paid for operating expenses Net cash flows used for operating activities Cash flows from (used for) investing activities: Cash paid for purchase of land Cash flows from (used for) financing activities: Cash received from owner as investment Cash withdrawals by owner Net cash flows from financing activities Net decrease in cash Cash balance, September 1, 20Y3 Cash balance, August 31, 20Y4 PE 1-8A a. Dec. 31, Dec. 31, 20Y6 20Y5 Total liabilities……………………………………………… $598,000 $569,900 Total owner’s equity………………………………………… $460,000 $410,000 Ratio of liabilities to owner’s equity……………………… 1.30 1.39 * $598,000 ÷ $460,000 ** $569,900 ÷ $410,000 b. Decreased PE 1-8B a. Dec. 31, Dec. 31, 20Y6 20Y5 Total liabilities……………………………………………… $4,042,000 $3,096,000 Total owner’s equity………………………………………… $4,300,000 $3,600,000 Ratio of liabilities to owner’s equity……………………… 0.94 0.86 * $4,042,000 ÷ $4,300,000 ** $3,096,000 ÷ $3,600,000 b. Increased $ 54,500 106,900 Zenith Travel Service Statement of Cash Flows For the Year Ended August 31, 20Y4 $(14,000) $(52,400) 21,600 $ 43,200 (21,600) (60,000) $ 881,000 (895,000) * ** * ** 1-6 © 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 1 Introduction to Accounting and Business Ex. 1-1 a. 1. manufacturing 6. service 11. service 2. manufacturing 7. service 12. service 3. manufacturing 8. service 13. manufacturing 4. service 9. manufacturing 14. service 5. merchandise 10. merchandise 15. merchandise b. The accounting equation is relevant to all of the companies. It serves as the basis of the accounting information system.