Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Jonick, Jennifer Schneider ISBN:978-1337902687 A+ GRADE ASSURED!!!!!!! 100% VERIFIED!!!!! CERTIFIED PASS!!!!!!

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, CHAPTER 1 xp



INTRODUCTION TO ACCOUNTING AND BUSINESS xp xp xp xp




DISCUSSION QUESTIONS xp




1. Some users of accounting information include managers, employees, investors, creditors
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, customers, and the government.
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2. The role of accounting is to provide information for managers to use in operating the busine
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ss. In addition, accounting provides information to others to use in assessing the economic
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performance and condition of the business.
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3. The corporate form allows the company to obtain large amounts of resources by issuin
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g stock. For this reason, most companies that require large investments in property, plant, and
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equipment are organized as corporations.
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4. No. The business entity concept limits the recording of economic data to transactions direct
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ly affecting the activities of the business. The payment of the interest of $4,500 is a person
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al transaction of Josh Reilly and should not be recorded by Dispatch Delivery Service.
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5. The land should be recorded at its cost of $167,500 to Reliable Repair Service. This is consist
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ent with the cost concept.
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6. a.
No. The offer of $2,000,000 and the increase in the assessed value should not be rec
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ognized in the accounting records because land is recorded on the cost basis.
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b.
Cash would increase by $2,125,000, land would decrease by $900,000, and owner’
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s equity would increase by $1,225,000.
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7. An account receivable is a claim against a customer for goods or services sold. An account p
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ayable is an amount owed to a creditor for goods or services purchased. Therefore, an accou
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nt receivable in the records of the seller is an account payable in the records of the purchase
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r.
8. (b) x p The business realized net income of $91,000 ($679,000 – $588,000).
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9. (a) xpxp The business incurred a net loss of $75,000 ($640,000 – $715,000).
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10. (a) Net income or net loss
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(b) Owner’s equity at the end of the period xp xp xp xp xp xp xp


(c) Cash at the end of the period xp xp xp xp xp xp




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, CHAPTER 1 xp Introduction to Accounting and Busines xp xp xp xp

s
PE 1-3B
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PE 1-1A
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$597,000. Under the cost concept, the land should be recorded at the cost to Boulder
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Repair Service.xp




PE 1-1B
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$369,500. Under the cost concept, the land should be recorded at the cost to C
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lementine Repair Service.
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PE 1-2A
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a. A = L + OE x p x p


$518,000 = $165,000 + OE xp xp


OE = $353,000

b. A = L + OE
x p x p


+$86,200 = +$25,000 + OE xp xp


OE = +$61,200
OE on December 31, 20Y
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9
= $414,200


PE 1-2B
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a. A = L + OE x p x p


$382,000 = $94,000 + OE xp xp


OE = $288,000

b. A = L + OE
x p x p


– xp = +$35,000 + OE – xp xp xp


$63,000 = $98,000
OE = $288,000 – $98,000 xp xp


OE on December 31, 20Y9
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PE 1-3A
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(2) Asset (Accounts Receivable) increases by $22,400;
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Owner’s Equity (Delivery Service Fees) increases by $22,400.
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(3) Liability (Accounts Payable) decreases by $4,100
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; Asset (Cash) decreases by $4,100.
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(4) Asset (Cash) increases by $14,700;
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Asset (Accounts Receivable) decreases by $14,700.
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(5) Asset (Cash) decreases by $1,600;
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Owner’s Equity (Terry Young, Drawing) decreases by $1,600.
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p wholexp orx p inx p part.

,