SOLUTION MANUAL Financial Accounting,13th Edition
m m m m
by William Thomas and Wendy M.Tietz Chapters 1 -
m m m m m m m m
12, Complete
m m
,
,Chapter 1 m
The Financial Statements
m m
Ethics Check
m
(5-10 min.) EC 1-1
m m m
a. Objectivity and independence
m m
b. Due care
m
c. Integrity
d. Integrity
, Short Exercises
m
(10 min.) S 1-1
m m m
a. Corporation, limited partners of a Limited-
m m m m m
liabilitypartnership (LLP) and Limited-
m m m mm
liability company (LLC). If any of these businesses fails and can
mm m m m m m m m m m
not pay its liabilities, creditors cannot force the owners to pay
m m m m m m m m m m m
the business’s debts from the owners’ personal assets. Credito
m m m m m m m m
rs can go after the general partner of a limited liability partner
m m m m m m m m m m m
ship.
b. Proprietorship. There is a single owner of the business,so the
m m m m m m m m m m m
owner is answerable to no other owner.
m m m m m m
c. Partnership. If the partnership fails and cannot pay its liabilitie
m m m m m m m m m
s, creditors can force the partners to pay the business’s debts
m m m m m m m m m m
m from their personal assets. Apartnership affords more prot
m m m m m m m m
ection for creditors than a proprietorship because there are tw
m m m m m m m m m
o or more owners toshare this liability.
m m m m m m m
(5 min.) S 1-2
m m m
1. The entity assumption applies.
m m m
2. Application of the entity assumption will separate Osmond’s p
m m m m m m m m
ersonal assets from the assets of Simple Treats, Inc. This will
m m m m m m m m m m m
help Osmond, investors, and
m m m
m m m m
by William Thomas and Wendy M.Tietz Chapters 1 -
m m m m m m m m
12, Complete
m m
,
,Chapter 1 m
The Financial Statements
m m
Ethics Check
m
(5-10 min.) EC 1-1
m m m
a. Objectivity and independence
m m
b. Due care
m
c. Integrity
d. Integrity
, Short Exercises
m
(10 min.) S 1-1
m m m
a. Corporation, limited partners of a Limited-
m m m m m
liabilitypartnership (LLP) and Limited-
m m m mm
liability company (LLC). If any of these businesses fails and can
mm m m m m m m m m m
not pay its liabilities, creditors cannot force the owners to pay
m m m m m m m m m m m
the business’s debts from the owners’ personal assets. Credito
m m m m m m m m
rs can go after the general partner of a limited liability partner
m m m m m m m m m m m
ship.
b. Proprietorship. There is a single owner of the business,so the
m m m m m m m m m m m
owner is answerable to no other owner.
m m m m m m
c. Partnership. If the partnership fails and cannot pay its liabilitie
m m m m m m m m m
s, creditors can force the partners to pay the business’s debts
m m m m m m m m m m
m from their personal assets. Apartnership affords more prot
m m m m m m m m
ection for creditors than a proprietorship because there are tw
m m m m m m m m m
o or more owners toshare this liability.
m m m m m m m
(5 min.) S 1-2
m m m
1. The entity assumption applies.
m m m
2. Application of the entity assumption will separate Osmond’s p
m m m m m m m m
ersonal assets from the assets of Simple Treats, Inc. This will
m m m m m m m m m m m
help Osmond, investors, and
m m m
