Solutions Manual
Accounting, 29th Edition
by Carl S. Warren and Jefferson P. Johns
All Chapters 1-24 Covered
,TABLE OF CONTENT
j j
1.jIntroductionjtojAccountingjandjBusiness.
2.jAnalyzingjTransactions.
3.jThejAdjustingjProcess.
4.jThejAccountingjCycle.
5.jAccountingjforjRetailjBusinesses.
6.jInventories.
7.jInternaljControlsjandjCash.
8.jReceivables.
9.jLong-TermjAssets:jFixedjandjIntangible.
10.jLiabilities:jCurrentjLiabilities,jInstallmentjNotes,jandjContingencies.
11.jLiabilities:jBondsjPayable.
12.jPartnershipsjandjLimitedjLiabilityjCompanies.
13.jCorporations:jOrganization,jStockjTransactions,jandjDividends.
14.jStatementjofjCashjFlows.
15.jFinancialjStatementjAnalysis.
16.jIntroductionjtojManagerialjAccounting.
17.jJobjOrderjCosting.
18.jProcessjCosting.
19.jActivity-BasedjCosting.
20.jCost-Volume-ProfitjAnalysis.
21.jBudgeting.
22.jEvaluatingjVariancesjfromjStandardjCosts.
23.jDifferentialjAnalysisjandjProductjPricing.
24.jCapitaljInvestmentjAnalysis
, CHAPTERj1
INTRODUCTIONjTOjACCOUNTINGjANDjBUSINESS
DISCUSSIONjQUESTIONS
1. Somej usersj ofj accountingj informationj includej managers,j employees,j investors,j credi
tors,j customers,j andj thej government.
2. Thej rolej ofj accountingj isj toj providej informationj forj managersj toj usej inj operatingj thej busine
ss.jInj addition,j accountingj providesj informationj toj othersj toj usej inj assessingj thej economicj
performancej andj conditionj ofj thej business.
3. Thej corporatej formj allowsj thej companyj toj obtainj largej amountsj ofj resourcesj byj issuingj stoc
k.j Forj thisj reason,j mostj companiesj thatj requirej largej investmentsj inj property,j plant,j andj equi
pmentj arej organizedj asj corporations.
4. No.j Thej businessj entityj assumptionj limitsj thej recordingj ofj economicj dataj toj transactionsj dir
ectlyj affectingj thej activitiesj ofj thej business.j Thej paymentj ofj thej interestj ofj $4,500j isj aj person
aljtransactionj ofj Joshj Reillyj andj shouldj notj bej recordedj byj Dispatchj Deliveryj Service.
5. Thej landj shouldj bej recordedj atj itsj costj ofj $167,500j toj Reliablej Repairj Service.j Thisj isj consiste
ntj withj thej costj principle.
6. a.
No.j Thej offerj ofj $2,000,000j andj thej increasej inj thej assessedj valuej shouldj notj bej rec
ognizedj inj thej accountingj records.
b.
Cashj wouldj increasej byj $2,125,000,j landj wouldj decreasej byj $900,000,j andj
owner’sj capitalj wouldj increasej byj $1,225,000.
7. Anj accountj receivablej isj aj claimj againstj aj customerj forj goodsj orj servicesj sold.j Anj accountj p
ayablej isj anj amountj owedj toj aj creditorj forj goodsj orj servicesj purchased.j Therefore,j anj acco
untj receivablej inj thej recordsj ofj thej sellerj isj anj accountj payablej inj thej recordsj ofj thej purchas
er.
8. (b)jjjThej businessj realizedj netj incomej ofj $91,000j ($679,000j –j $588,000).
9. (a)jjj Thej businessj incurredj aj netj lossj ofj $75,000j ($640,000j –j $715,000).
10. (a)jjjNetj incomej orjnetj loss
(b) Owner’sj capitalj atj thej endj ofj thej period
(c) Cashj atjthejendjofjthej period
, 1-1
Accounting, 29th Edition
by Carl S. Warren and Jefferson P. Johns
All Chapters 1-24 Covered
,TABLE OF CONTENT
j j
1.jIntroductionjtojAccountingjandjBusiness.
2.jAnalyzingjTransactions.
3.jThejAdjustingjProcess.
4.jThejAccountingjCycle.
5.jAccountingjforjRetailjBusinesses.
6.jInventories.
7.jInternaljControlsjandjCash.
8.jReceivables.
9.jLong-TermjAssets:jFixedjandjIntangible.
10.jLiabilities:jCurrentjLiabilities,jInstallmentjNotes,jandjContingencies.
11.jLiabilities:jBondsjPayable.
12.jPartnershipsjandjLimitedjLiabilityjCompanies.
13.jCorporations:jOrganization,jStockjTransactions,jandjDividends.
14.jStatementjofjCashjFlows.
15.jFinancialjStatementjAnalysis.
16.jIntroductionjtojManagerialjAccounting.
17.jJobjOrderjCosting.
18.jProcessjCosting.
19.jActivity-BasedjCosting.
20.jCost-Volume-ProfitjAnalysis.
21.jBudgeting.
22.jEvaluatingjVariancesjfromjStandardjCosts.
23.jDifferentialjAnalysisjandjProductjPricing.
24.jCapitaljInvestmentjAnalysis
, CHAPTERj1
INTRODUCTIONjTOjACCOUNTINGjANDjBUSINESS
DISCUSSIONjQUESTIONS
1. Somej usersj ofj accountingj informationj includej managers,j employees,j investors,j credi
tors,j customers,j andj thej government.
2. Thej rolej ofj accountingj isj toj providej informationj forj managersj toj usej inj operatingj thej busine
ss.jInj addition,j accountingj providesj informationj toj othersj toj usej inj assessingj thej economicj
performancej andj conditionj ofj thej business.
3. Thej corporatej formj allowsj thej companyj toj obtainj largej amountsj ofj resourcesj byj issuingj stoc
k.j Forj thisj reason,j mostj companiesj thatj requirej largej investmentsj inj property,j plant,j andj equi
pmentj arej organizedj asj corporations.
4. No.j Thej businessj entityj assumptionj limitsj thej recordingj ofj economicj dataj toj transactionsj dir
ectlyj affectingj thej activitiesj ofj thej business.j Thej paymentj ofj thej interestj ofj $4,500j isj aj person
aljtransactionj ofj Joshj Reillyj andj shouldj notj bej recordedj byj Dispatchj Deliveryj Service.
5. Thej landj shouldj bej recordedj atj itsj costj ofj $167,500j toj Reliablej Repairj Service.j Thisj isj consiste
ntj withj thej costj principle.
6. a.
No.j Thej offerj ofj $2,000,000j andj thej increasej inj thej assessedj valuej shouldj notj bej rec
ognizedj inj thej accountingj records.
b.
Cashj wouldj increasej byj $2,125,000,j landj wouldj decreasej byj $900,000,j andj
owner’sj capitalj wouldj increasej byj $1,225,000.
7. Anj accountj receivablej isj aj claimj againstj aj customerj forj goodsj orj servicesj sold.j Anj accountj p
ayablej isj anj amountj owedj toj aj creditorj forj goodsj orj servicesj purchased.j Therefore,j anj acco
untj receivablej inj thej recordsj ofj thej sellerj isj anj accountj payablej inj thej recordsj ofj thej purchas
er.
8. (b)jjjThej businessj realizedj netj incomej ofj $91,000j ($679,000j –j $588,000).
9. (a)jjj Thej businessj incurredj aj netj lossj ofj $75,000j ($640,000j –j $715,000).
10. (a)jjjNetj incomej orjnetj loss
(b) Owner’sj capitalj atj thej endj ofj thej period
(c) Cashj atjthejendjofjthej period
, 1-1
